Sorry...that should read the blue/ yellow and the green/ white wires at the TCI. Try and place each meter lead at the same time on each of those wires in the back of the plug and with meter on AC volts setting. Should get a .5 to 1V pulsing reading on these wires from the pickup coil when cranking the engine. As mentioned, if that is ok then have a look for another TCI

Ok, I tested Blue/Wite & Green/White on AC volts setting, cranking the engine, but only got a momentary reading each time, just as I took my finger off the starter button, a reading of "1" sometimes "2" remaining for a split second then disappearing.

Hi..the fact that you are getting some sort of voltage reading is a good sign. May need a better quality meter to check properly.

Ok, what should I look for ?
I don't want to spend a lot on something that does a lot more than I need and which I will seldom use.

The meter required needs to be able to set the voltage range manually. Does your meter have AC voltage range settings? ie 2V/ 20V etc. If it is on auto voltage range then it gets confused trying to read a pulsing voltage like this and you will get readings all over the place. If it has AC 2V setting that would be ideal. Plenty of the cheap chinese meters have this.

Thanks. That should help me find something suitable.
Cheers

There's been a bit of a delay in solving this problem, partly through finding a suitable multimeter at a cheap enough price, but one hopefully arrives today or tomorrow.
Also I have been fettling my 1947 500 Matchless G80. Such a different machine to work on ! But now that is nearly sorted, the XT is back on the workbench and hopefully will soon be running again.

New multimeter arrived today. Straight out to the workshop to try it.
Testing the Blue/Yellow and Green/White cables from the pick up, on the AC Volts setting, with motor turning over and got a reading varying between 1.9 & 2.4 which suggests to me that the pick up is at least doing something.
If its, as suggested, now time to go back to the TCI unit, what tests can I do on that ?

As there's nothing I can do today unless somebody suggests some simple tests I can do on the TCI unit, I've been looking at possible replacements I could use, at a moderate price and without having to order from around the world.
I have come up with "Horse Power Ignition" at 160 euro. Which though it seems to come with a bewildering range of set up options, can hopefully run as just standard.
And then there is "Electro Stator" at 192Euro.
I'm not rushing to buy but looking at these as options.
Has anyone got experience, good or bad of these 2 units ? Or can recommend any others ?

I recently bought a replacement CDI for a 1981 XT500 from Rex’s Speed Shop southeast of London. It was a direct swap part with no tuning options. I paid about $100 USD for that plus shipping and it has worked flawlessly. Not sure if they make or sell TCI units.