Philip, just to clarify the issue:
>I can log into other pc's in the office and use remore desktop connection to connect to pc's including my own.
So
your PC is allowing incoming connections via remote desktop.
>When I log into my own pc and try to connect remotely to another one I always get the message "The local policy of this system does not permit you to log on interactively."
The PC you are connecting
to is preventing you access via remote desktop.
>There must be something wrong with the settings on my machine but I can't work out what.
I dont think its your machine. From the above it would appear that your machine is allowing incoming connections via remote desktop but other PC's you are trying to connect to are not allowing it. Therefore, you need to set the other PC's to allow incoming remote desktop connections.
HTH
In the End, we will remember not the words of our enemies, but the silence of our friends - Martin Luther King, Jr.