Update - as the nice lady from WD Help pleaded with me to try the fast formatting software.
As asked … I have again redone the firmware and downloaded the fast formatting software MacWDQuick_Formatter_v1.0.0.5
Prior to installing & running that I ran the update WDDriveManager2-26b … that allowed drive to run to 377 Mb of 202GB of the Time Machine before dropping to again to a snail’s pace. I tried restartng the Macbook and this time the TM ran to 1.4 GB before slowing.
I then ran the quick formatter (no choice about partition or format) and ran TM which immediately failed. I restarted the Macbook and again TM failed so we can assume that one should avoid the quick formaatter as a solution !
I then partioned the drive (350GB My Passport + balance for TM) and left format unchanged as Mac OS Extended (Journaled) using the Apple Disk Utility
After restart drive has again run to 1.4GB before going into crawl mode
I have then read many more forum posts on the subjects and one has to admit that there are an equal number of problems with TM running slowly especially on the first run. After further attempts the TM has now progressed with a “normal” transfer rate and has quickly reached 20GB with fair data rate of about 17 Mb/sec … what I have done then is a mystery. I did delete the contents of the new external drive which I had created so perhaps when I did that I also removed some invisible files (WD Smartware ones ?) which were interfering.
I am also monitoring the CPU use by Finder - had seen a thread suggesting that by relaunching Finder one could unlock the “pipe” so to speak - but it appears calm and is not hogging the CPU.
Well … it appears to now work but all this effort makes me feel very very insecure. Not the sentiment one is supposed to have by buying WD ! Feel like making a second backup using someone else ! 
