Hi Gents. Thanks for your replies. No sharp edges for the wiring to chaf on. On further inspection, the loom has melted in at least four places and rather interestingly, the positive lead connected to the ammeter is also slightly burned. The flames appear to have come from some burning leaked diesel fuel which had run back along the tachometer cable! Hence why the fire died so quickly.
I have a dynamo rather than an alternator, but take the point about the voltage regulator. The engineer who restored the tractor has stripped out the burnt harness and we have compared it with the original 'tired' one which we took out. The wiring on the original does seem a bit more substantial.
As a result I have investigated buying an exact (as is possible) copy of the original lucas harness as I understand this is more substantial than the various replacements available. Once installed, we will be checking all cable and instruments etc. for shorts.