Logged a Veeam Support - Case # 00980018
Support had suggested to configure the antivirus exclusions for veeam: http://www.veeam.com/kb2034
And to also check if ports are open whcih has me puzzled as this is backup up to a local USB drive: http://helpcenter.veeam.com/endpoint/10/used_ports.html
I was afraid it was going to be the antivirus.
This particular laptop had issues a week ago with Kaspersky Antivirus corrupting itself. We since fixed that issue (at least appeared to) but it would now seem it has left some remnants of the original corruption and causing issues like this.
Thanks for the suggestions. I had applied the Veeam exclusion list to the antivirus on the 28 July with the same result. I have not applied the firewall port rules however as this laptop is backing up to a locally attached USB drive - did not realise it required network access for local backups to local USB storage.
I'll endeavour to look again at this soon when I get the laptop back of my client.
Thanks for the input.