I have now got DAVMAIL working on the server with Mercury POP3 Client.  It looks as if setting up accounts for each user still wanting to stick with Pegasus or other clients should be no problem at all.

Our american owners have decided to start using Exchange server and change all our users over to having their company email routed that way, it is nice if everything appears to come from the same IP after all.  This left us with a problem as it appeared at first that we might all have to start using Lookout.  There is however and excellent little tool called Davmail available at http://davmail.sourceforge.net/ which basically sits in between Pegasus and exchange so for us as users there is very little difference and of course all our email ends up being put into our normal inbox on the server here.

I have not yet tried setting it up with Mercury but in theory at any rate it should work there too although I would have to set it up for each users address and password.

I hope this helps anyone with similar issues.

Wow, brilliant! Thanks for sharing this. It took me some fiddling but I've got it to work, apart from smtp, but that's not a problem.

My Pleasure Steffan,

 I am glad it was useful.