Having run 'show full processlist' in mysql, I note that the majority of the connections form ispconfig are marked 'Sleep' - ie connection is idle. Is there an ispconfig process that is using a permanent connection where it shouldn't be used?
These connections are not from ispconfig. You mix up the mysql username "ispconfig" with the software "ispconfig" here. The mysql username ispconfig is used by all software packages that read data from mysql and the connections you refer to are from postfix, amavisd, pure-ftpd dovecot, courier and vlogger and the connection is idle of course if the daemons dont need it at the moment e.g. because the postfix process that opened the connection does not need to query the database at that momentyou executed the command.
Everything is as it should on your server, you had just a connection limit that was too low.