This was caused by my HDD being completely full up.
In /var/log/messages/ it reports there is no space left on device.
Jan 6 20:54:06 sme-backup squid[25843]: Process ID 25843
Jan 6 20:54:06 sme-backup squid[25843]: With 1024 file descriptors available
Jan 6 20:54:06 sme-backup squid[25843]: DNS Socket created at 0.0.0.0, port 32897, FD 5
Jan 6 20:54:06 sme-backup squid[25843]: Adding nameserver 192.168.2.3 from /etc/resolv.conf
Jan 6 20:54:06 sme-backup squid[25843]: User-Agent logging is disabled.
Jan 6 20:54:06 sme-backup squid[25843]: Referer logging is disabled.
Jan 6 20:54:06 sme-backup squid[25843]: Unlinkd pipe opened on FD 10
Jan 6 20:54:06 sme-backup squid[25843]: Swap maxSize 102400 KB, estimated 34133 objects
Jan 6 20:54:06 sme-backup squid[25843]: Target number of buckets: 1706
Jan 6 20:54:06 sme-backup squid[25843]: Using 8192 Store buckets
Jan 6 20:54:06 sme-backup squid[25843]: Max Mem size: 8192 KB
Jan 6 20:54:06 sme-backup squid[25843]: Max Swap size: 102400 KB
Jan 6 20:54:06 sme-backup squid[25843]: diskHandleWrite: FD 9: disk write error: (28) No space left on device
Jan 6 20:54:06 sme-backup squid[25843]: Write failure -- check your disk space and cache.log
Jan 6 20:54:07 sme-backup squid[25845]: Starting Squid Cache version 2.5.STABLE14 for
Deleted some stuff and now the problem is solved.
Thanks
Rob