Thanks for your help, but I'm afraid resetting the tools makes no difference.
Another oddity to this is: If you hold the mouse still as you left click to start this tool action, then as I said the area influenced pops up away from the circle denoted area. But if, still without moving the mouse, I right click, the circles jump to and directly centred over the influenced area correctly, although now it has the double headed lateral arrow superimposed as well, to enable size change. As soon as I release right click, it goes back to the initial position.
This is all in Camera Raw so I don't really see how the photoshop tools come into this. Different preferences anyway.