I cant login to my network accounts

I have setup my Mountain Lion server prefectly now and it will allow network accounts to sign in if their home folder is set to local but when i set it to a share allowed to be used as a home folder location it refuses to login and throws an error.

Do I need specific permissions on the shared folder or am I missing something i've tried Lion and Mountain Lion accounts but none of them work except of the user home folder location is set to local only.

You can see the images in the apple support forum to confirm i've done it correctly

https://discussions.apple.com/thread/4872466

To add in the log I am seeing this on the client machine :-

08/03/2013 19:52:08.039 NetAuthSysAgent[1810]: CFPreferences: user home directory for user kCFPreferencesCurrentUser at /Network/Servers/server.xyz.net/Home Folders/test is unavailable. User domains will be volatile.
08/03/2013 19:53:13.416 authorizationhost[1804]: ERROR | -[HomeDirMounter mountNetworkHomeWithURL:attributes:dirPath:username:] | PremountHomeDirectoryWithAuthentication( url=afp://server.xyz.net/Home%20Folders, homedir=/Network/Servers/server.xyz.net/Home Folders/test, name=test ) returned 64

But I can mount the share across the network, it creates the user folder in the right place it just out right doesnt login so it this a kerberos error or something i'm missing?

Any help would be great thanks

Even ensured the directory has the workgroup enabled and with read write perms and still error