dnsmasq wont resolve local names without suffix
 

I have setup dnsmasq on by slackware box. It uses my hosts file to resolve machines on my LAN. However it will not resolve names without the domain suffix.

For example as a domain name i just use myhome.co.uk
so an internal name is machine1

so
ping machine1.myhome.co.uk
works fine

ping machine1
gets host cannot be resolved.

machine1 is in the hosts file with
192.168.0.x machine1.myhome.co.uk
and aliased as machine1, so in full it looks like
192.168.0.x machine1.myhome.co.uk machine1
On the server pinging machine1 works fine as it just uses the hosts file
directly

I have set the domain=myhome.co.uk and I have set it to expand-hosts but it still does not appear to work.
I have also tried removing the domain in the hosts file.

Any ideas would be appreciated.

Cheers!