thanks for all your comments.
I wasn't paying particular attention to the temperature gauge on the run although it might have been showing a bit cool - round about the 80 degrees mark.
The heater knob seems to have just 2 positions with an 1/8th turn difference. It doesn't click (by feel or sound) like an electrical switch but it's a very small movement for a bowden cable. I'm thinking of choke & magneto controls on old motorbikes.
The dealer thinks it is the thermostat but gave the impression that it isn't a familiar problem.
So it's time to take another run to check the heater hoses then drop the dashboard to have a look at the heater control.