Thanks Max, Norm and Big Ted,
I found the condensor which I had but must have thrown out the backing plate for the points. (Not like me to throw anything out)
Finally ordered a new ignition from ebay, the link is pretty long so I have put it at the end. Mower started first turn and ran as well as could be expected. Pleasing I guess that my original diagnosis was correct but annoying that I spent so much of mine and your time on it.
Just one small problem now, it is very hard to start after you have had it running. I am still starting it with an electric drill, It seems to be flooding, if you jam the butterfly valve open it starts a little easier.
I am guessing that I have stretched the governor spring or put it back in wrong, or it may have something to do with the valve that is built into the push rod cover and connects to the carby.
I will try a few things tomorrow but any suggestions are welcome.
https://www.ebay.com.au/itm/ELECTRONIC-IGNITION-MODULE-FOR-VICTA-2-STROKE-160CC-POWERTORQUE-ENGINES/234632190585?_trkparms=amclksrc=ITM&aid=777008&algo=PERSONAL.TOPIC&ao=1&asc=20230105140155&meid=c663492d9cf246cc9a98a732db3f43ec&pid=101666&rk=1&rkt=1&itm=234632190585&pmt=0&noa=1&pg=2380057&algv=RecentlyViewedItemsV2&brand=Unbranded,pageci:dfb84142-ebf6-11ed-a070-6aa6c5497c75%7Cparentrq:f08eda291870ab8e9a878544ffff450a%7Ciid:1&_trksid=p2380057.c101666.m5481&pageci=ecb3f6c8-e2d0-49a4-aaf8-e6acb11aa251&redirect=mobile
