Ok, i believe i have found the solution. Before i get to the answer i feel it is important to state that this magento installation was transferred from a professional webhotell provider to a private server that was set up by a inexperienced user (me). Ok on to the solution.
Solution: I made a minor change to the code in the httpd.conf file
# Further relax access to the default document root:
<Directory "/var/www/html">
#
# Possible values for the Options directive are "None", "All",
# or any combination of:
# Indexes Includes FollowSymLinks SymLinksifOwnerMatch ExecCGI MultiViews
#
# Note that "MultiViews" must be named *explicitly* --- "Options All"
# doesn't give it to you.
#
# The Options directive is both complicated and important. Please see
# http://httpd.apache.org/docs/2.4/mod/core.html#options
# for more information.
#
Options Indexes FollowSymLinks
#
# AllowOverride controls what directives may be placed in .htaccess files.
# It can be "All", "None", or any combination of the keywords:
# Options FileInfo AuthConfig Limit
#
AllowOverride None
#
# Controls who can get stuff from this server.
#
Require all granted
</Directory>
The line of code that was changed was..
from this: AllowOverride None
to this: AllowOverride All
Admittedly not i understand this fully but it appears to have made all the difference and i hope this can help others in a similar situation.
