Dear Alan and Oli,
Thank you for sending me the test results. According to the logs, Parallels Tools are working properly. Video and mouse drivers are loaded and they are not supposed to cause any problems.
Please check if the issue is caused by Acceleration Level settings. Right click your Virtual Machines' desktop and choose Properties -> Settings –> Advanced –> Troubleshoot –> Hardware acceleration. The Acceleration Level should be set to Full. If the slider is moved on the left, even on a single division, the mouse will not work properly.
Best regards,
Xenos