Looks like I have found the answer.
An extract from this link : In manual mode (M), Canon compacts such as the Powershot G5 switches off the pre-flash (and thereby E-TTL). This makes it feasible to use plain optical slaves, that otherwise are disturbed by the pre-flash. This has the unfortunate side effect that E-TTL can not be used to control the power of the flash in manual mode (see p. 101 in the Powershot G5 manual for details)
Link
http://dpanswers.com/canon_flash.html#nettl
Yeah ........ spent most of today on this one.
Don