Have now had HD replaced with new 2TB drive but cannot restore from time capsule. Gets as far as "searching for time machine backups" - and has remained like that for over 2 hours

We don't really know what you are attempting.

Normally I think it is better to have loaded in a clean new OS.. and then use migration assistant.. is that what you are doing??

With migration assistant.. simply plug the TC directly to the computer by ethernet.. you can even reset the TC.. nothing will remove the backup.. but ensure you have the TM turned off so it doesn't attempt to do a backup.

If you are trying to use setup assistant.. then much the same applies.. forget wireless.. disconnect the TC from the network (if it is too far away) or buy a really long ethernet cable.. and plug it by ethernet directly to the computer.. you might need to reset the TC to make it connect..

More info needed.

Gets as far as "searching for time machine backups"

Not sure what you mean here.

If you reinstalled the operating system, Setup Assistant would have been the first option to appear to allow you to restore from a Time Machine backup to make your "new" Mac look like your "old" Mac.

If you passed on the option to use Setup Assistant on the initial start up of the "new" Mac, then you can use Migration Assistant on your Mac to restore files from a Time Machine backup of your "old" Mac to your "new" Mac

Migration Assistant is located as follows.........Finder > Applications > Utilities > Migration Assistant