Thanks all - took your sage advice and cut the first coat back with a wet sand before applying the second coat and it looks much better, much less lemon peel.
Tomorrow will be coat three and the paint is hard enough for a wet sanding after being left overnight. There is another advantage with a bit of sanding as it's easier to see where you are applying the new paint on the flat finish (well durr!)
Oh, and the flies are easily removed with 600 grit wet and dry.
