Apple Bluetooth keyboard not pairing at startup

Currenty using a 2008 iMac 24" with OSX Lion

Ever since I changed batteries the keyboard fails to be recognised on startup, and ends up in an infinite loop of trying to reconnect and failing. After few force restarts, it asks me to re-pair by entering a passcode. Why is it forgetting the settings?

I have also changed batteries again to elimiate the possibility of faulty batteries.. any ideas anyone, as this issue is giving me plenty of grief each time I come home from work having to troubleshoot this problem 😟

Thanks