••• I beleive I have found both the cause of the issue and also the solution•••
••• This post is intended for anyone else who is having the problem as the below may help you solve it•••
1. Cause of problem:
contact form 7 is conflicting with contact form DB by michael simpson
If anybody is using a version of contact form DB version 2.8.10 or later then chances are that your contact form 7 will refer EVERY SINGLE form submission as spam and therefore reject the submission. This is a conflict with contact form DB version 2.8.10 or later.
IF you are using contact form DB version 2.8.8 or earlier there is no known conflict as far as my testing goes.
2. Soultion to problem:
Deactivate contact form DB and that should solve the problem. contact form 7 should accept form submissions as normal as per your settings.
Summary
You will of course now be looking for another storage soultion for your contact form submissions as I am but as yet I have not found one. I will keep looking. I will also attempt to contact the author of contact form DB to alert him to this issue. hopefully this results in a fix.
I hope the above helps someone.