OK I give up.
Carb seems to have very little wear, new jets throughout, fuel level correct, recently ultrasonically cleaned - i.e. nothing wrong with it as far as I can see.
Starts and runs well and yet no amount of adjustment will get rid of the surging, adjusting the air screw and bypass screws affects the pick up drastically, but has little or no effect on tickover and / or surging.
The surging is making what is a nice little bike to ride a very upleasant experience.
I know there are various threads about carbs / surging and have read most of them, also made loads of carb adjustments but I cannot tune the surging out.
I have other 2 stroke bikes (Kawasaki Triples) and they respond very nicely to tweaks of the carbs, unlike the MZ.
30mm Mikuni the way to go ?