I think I've got what I wanted...a hanging chain! I rigged a skeleton to the links and added an IK chain as you said.  Simple once you know how! 

Just a couple more questions... when I bend the chain into a tight loop some of the links bend, twist and distort. On shallow curves this is not so obvious, but is there a way to stop this happening? 

Second... on another forum someone suggested using Physics to get the effect I wanted. I tried it and the links started to hang right, then they shot off all over the screen. Is this a good, bad or just another way to do it? Any advantages?

Here it is anyway, I need to tidy a few things up like making the links touch each other,  but this is what I wanted. Thanks for your help.