Question : Problem: LCD screen has multi coloured lines running accross

Laptop: Novatec, OS Windows 98
When boot from cold GUI is visible, but deteriorates rapidly, first it gets fuzzy (edges of text and icons jagged) this develops to a series of black horizontal lines about 2" long from the left hand side. Then finally nothing but a mass of Horizontal coloured lines across the screen

I have started in safe mode and the same thing happened
Connected to a external LCD monitor at first all was fine (with ext. monitor), although the laptops screen was deteriorating, but when I reboot the startup/welcome  screens appear on the external monitor but a final connection cannot be established.

Answer : Problem: LCD screen has multi coloured lines running accross

From your description (a photo would help), the LCD panel is failing.  The only thing you can do if that's the case is to replace the panel, which can be almost as expensive as a new laptop.