Thanks for that info lexden16. I agree that set up should work and it is exactly what I have been trying. After all, that is all the BT router is doing. However, whether it is different firmware I am using or what, the FB will not establish a connection. It just reports that the ISP is not responding to the PPoE packets.
There is a username to enter for BT, but no password. Most reports say you do not need a password, odd ones say you should enter a space. I have tried both and no joy.
Have followed all the details in the link (except no password) and still nothing.
Guess it just must be a funny in my FB.

I suggest that you join the BT Community and PM Toekneem. There are also some other F!B users on that forum. My replacement F!B is working well as a modem but my max attainable has fallen by 17% which makes me even more convinced that I have had a line fault. Fortunately, the max attainable is still above 80 so I am on an 80/20 connection with a 77/20 synch.

Having typed the above - a thought. When you set up the page for PPPoE did you remember to set the up and down speeds for your line?

I'm pretty sure that I recall an issue in switching between DSL and eWAN 'modes' on the FB.
The solution I have seen in the past is to factory reset then run through the configuration wizard from there.
You certainly shouldn't need a HH3 between the BT modem and the FB, this sounds like you're maybe selecting 'share existing internet connection' instead of 'Make own connection to the internet' in the Operating mode section or you've ticked the 'Use VLAN' option - this should NOT be ticked when connecting via ethernet WAN.