Neale, you are correct with the first questions.

At the moment I have 240V to 415V (IIRC!) transformer, which then has a star connected motor as the idler.
There is a start capacitor connected via a 240AC relay connected between the star point and the false/generated leg of the star, so once the generate leg reaches 240V, the start connector gets disconnected.
There are also a couple run capacitors to tweak the generated leg voltage, and one of them melted at the weekend.
The converter was built about 15 year ago, so it's hardly surprising the capacitors finally failed.

What I was considering, was removing the transformer/relays/capacitors, then just fit an oversized 240V in 400V out VFD, and connect it to the idler motor (I would probably upsize the motor as well to give a bit more inertia). My concern is transients, both from the output of 240-400 VFD, and from 3 phase loads (my lathe runs a 400V VFD).
What I think I need to add is a sine wave filter to the VFD output.


Nick, the quote I got for 3 phase installation is around £2500 (plus the required digging + cabling), so buying a completely new converter isn't really that feasible. The main reason I don't go for mains 3 phase, is it would involve another meter with standing charge.
If this idea would work, I'd get far better 3 phase for a few hundred.