Thanks for the reply. It's the later. You will have to bear with as I'm a newbie but when you say compression do you mean the stem bolt at the top too tight? I've tried having it finger tight and I've tried really tightening it but with the same effect.
Correct, the bolt on the top is the one that adjusts the compression on the bearings - However it is important that you tighten this
before you tighten the stem clamp on to the fork's steerer tube.
You should tighten it enough so that there is no play in the headset, but it should also be loose enough so that the steering assembly (fork/wheel/handlebars etc) can still turn freely by itself when the bike is picked up.
To ensure that you haven't set the compression too loose, once you have set the compression and tightened the stem clamp hold the front brake on hard and try rocking the bike back and forwards from the handle bars. If you feel any play then the compression on the headset likely isn't high enough.