Thank you for the reply.
Yes Firefox is the default browser, however, exactly the same thing happens if I use Konqueror. There is a transparent proxy within the firewall but I have tried turning this off and it doesn't change anything.
When I'm within Firefox, the placing the mouse over a url does show the address correctly and does go to that address when clicked. The problem is only with URL's embeded in documents outside of the browser (such as email).
Sometimes when I click on such a URL, I get a "copy file" progress indicator in the status bar before it launches Firefox, and somtimes firefox comes up with an incomplete page which rather than referencing a web url refernces some form of internal KDE cache. As an example here is an url when I hover the mouse over an email message:
and here is the address that comes up after firefox eventually opens a partial page:
So I expect the issue does relate to caching but I'm unsure where to go from here.