I couldn't see how to change the group permissions, Windows Explorer didn't give me the choice.
Howsoever, as the file was only a 4 byte test file with a count in it I created an appropriate text file on the C: drive, copied to the test folder, and bingo it worked! And the approach also worked for the other two test sites I run under IIS.
As it is purely a very local test environment and is never exposed to web access, permissions are less relevant than they would be if it were web visible.
Many thanks for guiding me to a solution.
Tony