Falko, thanks for the reply. While my apache2.conf file contains the same
<directory></directory> statements as what you posted above, it didn't work on my installation. However I have taken your advice and through the "Apache Directives" field in ISPconfig I have entered the directives contained in the .htaccess file and applied them to the entire virtual host. I left the .htaccess file renamed _htaccess.
This now takes care of this part of the problem with my installation of eGroupWare. I am still not out of the woods yet. See my post in this section regarding "Web-FTP".
Thanks for your help