Hi all,
I know it's been over a year since I posted my starter problem but I thought I would get this down in case anyone experiences the same problem...
On investigation it turns out the short length of braid that runs from inside the start motor casing to the outside had completely corroded. The electrical arc and smoke was just that as the corrosion briefly sparked and fell apart (obviously the extra power from the fully charged battery was enough to finish it off!).
Anyway, I didn't have time to get a replacement (it was Sunday afternoon and I needed the car for Monday morning) so I fashioned a new 'braid' from a piece of old copper pipe bracket and it works fine! In fact it's been working fine for over a year now!!
I'm not suggesting this is the correct way to go about curing the problem but it does give an extra avenue of investigation before spending hundreds of pounds on batteries, starters, alternators etc...