Update on progress.
So the rebuild of photo library didn't work. FCP crashed on start up.
Remove the library and FCP works.
I created a new empty photo library and FCP worked.
I took the plunge and added a huge chunk of photos to the library (photos were referenced from a NAS drive). Interestingly the size of the library is now greatly reduced, although not all photos are added, so I will keep an eye on this.
As i progressed I checked, and FCP continued to run.
One of the last things I did was turned on photo stream.
FCP stopped working.
Various checks seemed to indicate that this might be where the problem is.
I have just created another a new system photo library and switched on photo stream and photo sharing. All seems to be working. Currently downloading all my iCloud photos to my library, at which point I will turn off the uploading feature, as all my other photos are stored on elsewhere and I don't want them in the cloud.
Hopefully this has now solved the problem.