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Hayter 41 Lawnmower - pull cord not returning?

I pulled the start cord and engine failed to start and then the cord did not recoil as per usual. Engine recently serviced and almost always starts first time.
Fly wheel for pull cord recoils when taken off machine if wound up by hand. When replaced onto machine the cord is not retracted whether in gear or not.

Any advice would be appreciated?
Peter, June 2013
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