magic mouse 2 connected but not working

I have a Magic mouse 2 connected to a 2015 Imac, but recently developed an issue where it is showing as connected, but it's not working. It was working fine for a long period of time before this suddenly happening for no reason.

I have tried everything I know including:

• Removing all bluetooth devices
• Debugging and resetting Bluetooth etc
• deleting Library/Preferences Mouse files
• Resetting PRAM
• Boot in Safe mode

I am at a loss, so wondering if it is possible (dare I say it) for there to be a hardware issue with the actual mouse?

Can anyone advise?

Thanks

Mark