Thanks. Yes, difficult to explain this one! I tried your suggestion but in fact those settings were already on.
I think I've fixed it. I had converted an old 2003 template to a 2010 .dotm template and it seems as if the old format tables behave differently. I had one set up as an AutoText entry that a macro inserts into the footer and then fills in with variable text depending on a dialog box users fill in. This table behaved strangely in that its top remained fixed and when typed text inside it started to wordwrap, the table expanded downwards rather than upwards as you'd expect. I have remade the table in 2010 and replaced the AutoText entry with the new table and now it behaves correctly, expanding upwards instead of downwards.
By the way, in case someone has missed this, AutoText is now in the Insert tab of the ribbon, under the bizarrely named Quick Parts option.