Coxy, I think you are probably on the right track, ie dodgy earth.
Does the gauge only fall when the fuel pump is on (engine running) or all the time the ignition is on? Try pulling the fuel pump relay.
I'm sure the earths for the pump and sender are on seperate wires but are grounded on the same tag, this is the first item to check, should be close to where the loom from the tank enters the car, but I can't remember exactly where, under the back seat maybe?
If this is ok then maybe an earth connection to the dash or auto check computer.
A good way of checking earths is to measure for a voltage on the earth wire when the circuit is loaded, tiny voltages <0.5 V are usually no problem, but the lower the better the earth is.
This is usually done with a wire piercing probe (good practice to tape the tiny hole afterwards) or a very fine probe to "backprobe" the plug.
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