Barryjj said

Requested re-entry of correct password is not accepted either. I can however log on to Outlook on line through Firefox and connect using the correct password. I have changed nothing in any settings, and the correct password is still stored in Thunderbird settings.

Any crash logs or specific error form that smtp server showing in thunderbird? something like:

Error: tls protocol or username / password not accepted or supported on smtp.foo.bar ?

Sending of password for user xxxxxxxx@outlook.com.au did not succeed. Mail server pop-mail.outlook.com responded: Authentication failure: unknown user name or bad password. [Error="ProxyNotAuthenticated" AuthResult=0 Proxy=SIXPR04MB0892.apcprd04.prod.outlook.com:1995:SSL]

Matt has a solution here:

http://thunderbirdtweaks.blogspot.com.au/2016/06/hotmail-proxy-errors.html

Does that help you?

Thanks Corey, worked like a dream. If it was so simple, I am left wondering why Microsoft, with all their available resources, were not able to advise their clients what was going on......... The answer, of course, is obvious. Bazza.