After the light becomes green again, does the shuffle continue to play music for any length of time? In other words, even though the light is green, is the battery actually still charged at full capacity?
Try charging the battery to full. Then, play the shuffle unattended at your normal volume and have it play from the All Songs list continuously (no stopping). When it eventually stops playing, turn it OFF for at least ten seconds, then try to turn it ON again. If it plays again, let it play again until it stops playing. Do this until it no longer turns back ON, because the battery is fully discharged. Then charge it full.
See if this problem recurs or not.
Yes, I used the ipod today (jogging) and it played music throughout for 40 minutes. However I noted your advice and allowed the ipod to run completely down with a view to charging again as you described but when I plug into my Mac the Ipod doesn't show anywhere. I tried several times but to no avail, the ipod doesn't come up as a device and therefore I cant recharge it.
It will still charge, even if it does not appear on the computer with a data connection. For example, if you connect an iPod to a USB power adapter, it charges. When you connect it to USB, does the shuffle's light come ON in any way. If it does, what does it do?
If the light does not come ON, there is no power getting to the shuffle. That would explain why it does not appear on the computer. And the next step would be to troubleshoot the connection to determine why the shuffle is not getting power.
Make sure the docking cable plug is inserted completely into the headphones jack, as shown in this document
If it does not connect for power (no light), try pulling it out very slightly to see if you can get the light to come ON.
There are three possibilities for the shuffle not getting power. (1) The USB port not working or not supplying sufficient power. (2) A faulty USB docking cable. And (3) a problem on the shuffle (such as a bad headphones jack or logic board).
For (1), if you are using a USB hub or the spare keyboard port, try connecting it to a direct USB port on the Mac with other USB devices disconnected (you can leave standard keyboard/mouse connected). If you have not shut down (powered off) the Mac in a while, you should do that now (to "reset" the hardware). If the shuffle is still not getting power, connect something else (preferably something similar like a USB flash drive or port-powered external drive) to the same USB port, to confirm it is working and supplying power.
For (2), you'll need to try another docking cable with your shuffle, or try your cable with another shuffle (that is 4th gen or 3rd gen). If that's not possible, and there's an Apple Store nearby, you may want to make a reservation at the store's Genius Bar and take it there.
If you can rule out (1) and (2), the problem is likely to be (3). You said you use it when jogging. It's possible that even if the shuffle does not get wet, over time, moisture from sweat seeps inside the shuffle and causes short circuits.
I've ruled out options (1) and (2) by trying other devices, other usb points and I also have a second docking cable, but no dice I'm afraid. I think the moisture scenario is unlikely in my case as I have the shuffle clipped to my shorts pocket where it's shielded from sweat and also rain. Looks like a fault has developed. Thanks for your help, I guess I'll need to contact Apple.