Thanks Clive and i've now moved on some but i have encountered another hurdle.
The HAL file for the set up is shown below.

# Generated by stepconf 1.1 at Sun Jan 15 15:33:03 2017
# If you make changes to this file, they will be
# overwritten when you run stepconf again
loadrt trivkins
loadrt [EMCMOT]EMCMOT base_period_nsec=[EMCMOT]BASE_PERIOD servo_period_nsec=[EMCMOT]SERVO_PERIOD num_joints=[TRAJ]AXES
loadrt hal_parport cfg="0 out"
setp parport.0.reset-time 5000
loadrt stepgen step_type=0,0
loadrt pwmgen output_type=1

addf parport.0.read base-thread
addf stepgen.make-pulses base-thread
addf pwmgen.make-pulses base-thread
addf parport.0.write base-thread
addf parport.0.reset base-thread

addf stepgen.capture-position servo-thread
addf motion-command-handler servo-thread
addf motion-controller servo-thread
addf stepgen.update-freq servo-thread
addf pwmgen.update servo-thread

net spindle-cmd-rpm => pwmgen.0.value
net spindle-on <= motion.spindle-on => pwmgen.0.enable
net spindle-pwm <= pwmgen.0.pwm
setp pwmgen.0.pwm-freq 100.0
setp pwmgen.0.scale 876.0
setp pwmgen.0.offset 0.0
setp pwmgen.0.dither-pwm true
net spindle-cmd-rpm <= motion.spindle-speed-out
net spindle-cmd-rpm-abs <= motion.spindle-speed-out-abs
net spindle-cmd-rps <= motion.spindle-speed-out-rps
net spindle-cmd-rps-abs <= motion.spindle-speed-out-rps-abs
net spindle-at-speed => motion.spindle-at-speed

net spindle-pwm => parport.0.pin-01-out
setp parport.0.pin-02-out-invert 1
net xstep => parport.0.pin-02-out
setp parport.0.pin-02-out-reset 1
setp parport.0.pin-03-out-invert 1
net xdir => parport.0.pin-03-out
setp parport.0.pin-04-out-invert 1
net zstep => parport.0.pin-04-out
setp parport.0.pin-04-out-reset 1
setp parport.0.pin-05-out-invert 1
net zdir => parport.0.pin-05-out
net spindle-on => parport.0.pin-17-out

setp stepgen.0.position-scale [AXIS_0]SCALE
setp stepgen.0.steplen 1
setp stepgen.0.stepspace 0
setp stepgen.0.dirhold 35000
setp stepgen.0.dirsetup 35000
setp stepgen.0.maxaccel [AXIS_0]STEPGEN_MAXACCEL
net xpos-cmd axis.0.motor-pos-cmd => stepgen.0.position-cmd
net xpos-fb stepgen.0.position-fb => axis.0.motor-pos-fb
net xstep <= stepgen.0.step
net xdir <= stepgen.0.dir
net xenable axis.0.amp-enable-out => stepgen.0.enable

setp stepgen.1.position-scale [AXIS_2]SCALE
setp stepgen.1.steplen 1
setp stepgen.1.stepspace 0
setp stepgen.1.dirhold 35000
setp stepgen.1.dirsetup 35000
setp stepgen.1.maxaccel [AXIS_2]STEPGEN_MAXACCEL
net zpos-cmd axis.2.motor-pos-cmd => stepgen.1.position-cmd
net zpos-fb stepgen.1.position-fb => axis.2.motor-pos-fb
net zstep <= stepgen.1.step
net zdir <= stepgen.1.dir
net zenable axis.2.amp-enable-out => stepgen.1.enable

net estop-out <= iocontrol.0.user-enable-out
net estop-out => iocontrol.0.emc-enable-in

loadusr -W hal_manualtoolchange
net tool-change iocontrol.0.tool-change => hal_manualtoolchange.change
net tool-changed iocontrol.0.tool-changed <= hal_manualtoolchange.changed
net tool-number iocontrol.0.tool-prep-number => hal_manualtoolchange.number
net tool-prepare-loopback iocontrol.0.tool-prepare => iocontrol.0.tool-prepared

If I input M3 S876 then the output from Pin 1 is 4.9V and the spindle runs at approx 876rpm.
If i input S438 the output drops to a steady 2.45v but the spindle rpm oscillates between 0 and 876rpm. The closer i set the S speed the more the spindle is at max speed.

If I use a power supply to feed into the VFD at say 2.45V then the spindle runs at the correct speed.

I deduced there must be some other input that's causing this oscillation and measured the AC voltage on pin1 at 2.7V. I can't determine it's frequency but if this is very low then it might explain the issue?

Is there a way of filtering out the AC component if in fact it is this that is causing the problem?