Thanks for the response. Yes your method does work , however you loose the ability to have the height map properly effect the normal (the underlying normal will always show through when using tools with height only), you also lose the auto fill function on substance effects applied to the layer.
I guess I would like to see the normal channel blended only with the normal map applied at the beginning of the project. If I'm going to use SP I need this functionality, particularly when using baked normals as a base.
As info, the alpha channel now works if you change the channel type to sRGB.
Thanks again for the help hopefully one of the dev's can chime in on this subject.