I have just found that my Master Cylinder is covered in brake fluid. On closer inspection there is a small cut out/hole on each top cap (double sided "flip flop" levers, and on applying the brakes a small amount of fluid sort of bubbles out of this hole !

I have remove the top and inspected the rubber diaphragm seal thing and there is a tiny pin hole in it ! I cannot imagine how a hole would appear, (however I did shorten the hose and bleed the brakes recently !) I assume that there is not supposed to be a any hole in this ? do I need a new one ?

Yes, sounds like the rubber is compromised.

You may need to re-bleed the system too unfortunately.

Compromised eh ? No problem bleeding though, Not like my mate's AVID'S !!!