Whilst I was stationary at traffic lights and my gearbox was set to “park” I used my mobile phone.  The Police issued me with a Fixed Penalty. My mobile was not used at any ther time except whilst I was stationary.  The police advised me that due to the ignition being on this was still an offence. Is this correct?

The Police are correct.  If the vehicle was not parked, stationary and engine off, it is being “used” as far as the law is concerned.  This is particularly the case if you are in a queue of traffic waiting at lights etc., as opposed to pulled up out of the traffic at the side of the road. In those circumstances, you are best off cutting your losses and taking the Fixed Penalty. You will also need to advise your insurers of the points imposed.