While waiting for the solution I've reinstalled CircleDock v0.9.2 Alpha 8.1 with the middle button as toggle for visibility and as long as this version is running CD v1.5.4.6 also keeps responding to the middle mouse button. When I quit CD v0.9.2 Alpha 8.1 I have the same problem again as described above.
For some reason the mouse toggle setting was being "lost" when the main settings dialog is loaded but only if the toggle button was the middle mouse button; if the toggle button was set to the X1 or X2 mouse buttons all was fine. The next version contains some code which should rectify this.
Mark