I actually used a few different ideas over the course of trying. I didn't know you could get reverse drill bits, next time I'll get a set.
What I ended up doing is drilling two small holes on either side of the bolt hole and pushed two finishing nails into these hole which went through the cage nut, this held it from turning. Then finished drilling with a 11/32 bit and lucky enough I was pretty much centred, then used the tap to clear the rusted threads and the remaining bolt out.
I will weld the the finishing nails in the two holes I have so the bolt can be removed again with out the cage bolt turning.
Thanks for the picture DADS, sure helps to see what is behind what you're working on.
Thanks for all the input guys!

John