Ran Spybot in Advanced Mode (through start /programs)..under cookies.cbi, selected c2.lop in the exclusion section. This thus allowed spybot to complete the scan. (I reproduced the problem on one of my testing laptops).
This however is a short fix and has not sorted the underlying problem. I guess hijack this is the next step although I am loathe to do this in-situ at a customer's house.