I think I've sorted it, once I un-hid protected operating system files there was a program sitting in C:\Program Data which matched the name of the .exe file that was running this apparent Windows 7 Recovery process.
I killed the process then deleted the .exe plus some other .dat files that were named the same and it hasn't come back.
I ran Combofix and it produced a report that didn't make any sense to me, so I tried Malwarebytes too which found nothing after a full scan. I'm currently removing McAfee and will install MS Security Essentials which I've used for a year or two myself without any problems.