Fixed!
Safe mode was enabled in ISPConfig.
Just in case it helps - DO NOT check the safe-mode box when configuring a site for a client in ISPConfig as this adds various php settings which stop apache writing to the directory. So, with this unchecked, the upgrade went without a hitch with the original set-up (i.e. /var/www/web20/moodledata with web20_admin:web20 / 777).
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