Ok, I am getting really annoyed with macOS now, so I asked this question
and the answer worked! Great!
However after signing out of iCloud and signing back in this time with documents switched off and Optimise switched off, my Mac is still insisting on downloading my documents folder!
As you can see from the image both Desktop and documents is not selected, Optimise is unchecked and yet you can see it is still downloading 44GB of data I don't want on my mac! Thats why I bought the external storage plan!
Why? This is driving me crazy!!