Another update guys, it took 4 hours to diagnose the fault, turns out the plastic guide for the timing chain has snapped and bent a few sprockets. That has then gone into the sump. It needs a new chain, new sprockets, oil flush and the sump needs clearing. Apparently a 7 hour job, parts and labour coming to a small £1360. The car is just over 6 months old and only done 71k.
I asked my dealer if this can be done on good will, they said my car was too old which i wasnt best pleased with. If a non servicable part goes at 71k it doesnt say much for BMW reliabilty (i wouldnt even expect a timing belt to have issues at this mileage never mind a chain). So i spoke to BMW UK. They said it could be doen on good will and to go back to the dealer. A few phone calls later and with BMWs backing my good will application is in place. Will see what they offer as good will. Im hoping it should cover the full cost. I wish the dealers wouldnt try it on in the first place and would save me alot of hassle!!