Graham,
Thank you for getting back to me and for the advice. I can see how that set up would work now (and that might be the simple explanation for the chafing, if it was originally designed to work with wire).
As you suggested, I've attached pictures which show both the sheave and set up at the base. The latter is a bit of mess of lines, but hopefully illustrates it well enough. The current set up has the halyard emerging from the slot above the mast gate, then passing through the gate where the loop in the halyard is hooked onto the tensioner on the mast step. If you've any other ideas, please let me know!
Thanks,
Philip