Very many thanks Blurredman and Guesi.
In reply to Blurredman. I may have confused you with my description "OIL Seal"...perhaps I should have used the MZ description "O ring" but I didn't as it's NOT an O Ring!...A better description would be "Piston Pressure-Seal" or similar. There is an oil seal at the lever end however. (Item 3 in the parts diagram above)
In reply to Guesi...Yes that's the part and many thanks for actually showing the picture of it in situ on the piston. It seems obvious now looking at your picture and indeed after checking the new item again much more closely. It is clear there is a taper on the circumference which gets pushed outwards by the pressure to further seal against any oil being passed by it. I did not notice this originally.
Fitting it will need a lot of care to avoid folding back the edge so I will use a slight rotating action as I push it into the cylinder.
Hopefully this has also helped other restorers too....This is why I have amended the Title just now.
I am very much obliged.
Les