Update:
I had to boot in open firmware and change start-up permissions but managed to boot through USB and clone my old drive in the end. Method for booting a USB drive (through online research, I am no expert!):
- In DU click on volume and find out partition number by pressing Info (i.e. 3)
- Boot holding Command+Option+O+F
- Type dev / ls and take note of disk volume (i.e. /pci@f2000000/usb@1b/disk@1 in my case)
- Type setenv boot-device /pci@f2000000/usb@1b/disk@1:3,\\:tbxi (where 3 is the partition number)
- Type printenv boot-device and check boot device has changed from hd to /pci@f2000000/usb@1b/disk@1:3
- Type mac-boot and cross fingers
Thanks all for your assistance!