SOLUTION: to "can't access tty; job control turned off"
Apologies for answering my own post, but this seems to be a problem many people have had.
For
some reason (there could be many) the boot kernel can't mount the root
file system and hence cannot find all devices and tools to run the
login.
In my case booting a custom kernel there were no modules
for squashfs and unionfs so those file systems which include the root
could not be moutned.
Installed squashfs-source and
unionfs-source, build the kernel the build the extra modules for
squashfs and unionfs with "make install". Kernel must be built first as
squashfs and uniofs make needs the build from
/lib/modules/kernel-version/build.
Ran update-initramfs -u -k custom kernel version to make the initrd.
Rebuilt the
compressed file system.
Now linux boots and runs live from a USB memory stick with a custom kernel.
Hope this helps others with the same problem.
Cheers,
Rob Key