That never crossed my mind until you mentioned it. The account in question is an IMAP account which I thought may have been the cause. However I've just sent a number of test messages with pictures attached, and they all displayed correctly on opening. So it appears to be just one contact.
I'm at a loss as to why the pictures sent from this contact can be viewed from the attachments but not within the body of the email.
Thanks for the pointer. It proves the IMAP account is fine.