So, after a week of continued investigation and help from Apple Support we've narrowed my problem down and can reproduce the issue and stop it from occurring. id be interested to see if these tests produced same results for others with this issue.
1. Booting in to Internet Recovery mode and running for hours just using browser works perfectly
2. Creating a brand new partition and installing a clean OS (10.10.3) with a local user account, specifically not connecting to any Apple services (inc iCloud) or installing any other software. Works perfectly for hours using Safari and Apple mail (using a gmail account in this instance).
3. Wait for it ... Logging in to iCloud via the control panel and enabling all services ... After a few minutes the problem with jittery cursor comes back with a vengeance.
4. Logging out of iCloud and rebooting things return to normal and the cursor behaves perfectly as expected.
5. Repeat steps 3 and 4 to double check.
I'd be very interested if anyone else can repeat and witness the same behaviour as above. The issue has now been escalated to 3rd level support for diagnosis and I await an answer as to exact cause.