OK sorry guys I was a bit premature with last post - I’d like to delete it, but can’t find a way. Starting Xcode again - after it wanted to load/install new extensions, and re-boot the Mac. I ran Xcode again and got the "Preparing Watch" message all over again- after around 15 minutes it installed. I will sign off now, project running, problem unresolved, and maybe go to the gym and punch a bag for an hour

Yes my watch hadn't updated. Updated to watchOS 8.6, re-ran xCode project and after a short "Fetching debug symbols for iPhone" it worked straight away without the "Making Apple Watch ready" message. SO in my case, "user error"