Greetings fellow HGF enthusiasts

Just to say hi, and ask for a bit of help.

I've re-bought a Mk1 MGF I had owned a few years ago, had it repaired together with a new head gasket. However, MGF life is never straightforward. My wife was driving back from work and the car started throwing out white steam from the engine bay, so stopped called the AA who whipped it off to a garage who diagnosed a cracked thermostat which while annoying was understandable. We picked the car up a couple of nights ago, drove back twenty miles with no problem. The my wife was driving into work, covered fifteen miles or so, then stopped at a shop. As soon as she stopped the car belched a huge cloud of white steam out of the rear. There was no sign of overheating beforehand and she limed into work where she called the AA out. The garage they sent out checked the car out, topped the coolant up and then told my wife the car was safe to drove back home [don't worry I couldn't believe the garage said to do so and I rang the AA to double check]. Well the car and wife made it back home with no issues, no coolant loss, no mayonnaise in the oil. So I took it for a test drive for twenty miles this morning, with non signs of steam or overheating. But when I arrived back home to park as soon as I went static steam spewed out of the engine again. Checked the water, it had dumped a good half or more of the coolant and there was oil in the water, nice brown emulsion but the AA, bless their cotton socks, checked the water for exhaust gases and all seemed ok. 

I'm perplexed, as is the AA. Has anyone any suggestions as to what s going on?

Sounds like a failed/stuck-open pressure relief valve on the header tank cap. Many on this forum suggest always carrying a spare. "New" ones from less reputable sources have also been known to fail.

did you open the boot/engine cover to look for the source of steam?

A lot of ordinary mechanics, when it comes to our cars, they would not know the their arsehole from their armpit without first having a sniff....and even then they'd most likely get it wrong!
Yes, carry a spare coolant cap, but also make sure the cooling system has been bleed properly at the 3 bleed points. The procedure for this can be found in the workshop manual, which is downloadable from the library section of this Forum, if you don't already have one.
Other possible causes are radiator cooling fans not kicking in when required, also check the engine bay fan for operation. Always suspect the new part, the new thermostat may be faulty or even the wrong one installed.
Do you have a low coolant alarm fitted? if not, you must get one, running our cars without one is pure and utter madness. There are various ones available, I use the Browns @ Gammon unit and have done so for over 10yrs but I believe some of the others are excellent, including one made by one of our own forum members.
The sludge in the oil could be a bad sign, I'd get either a cooling system sniff test or a cooling system pressure test, probably both and top them off with a compression test.
It is of course possible that that sludge is left over from before the head gasket change, they may not have bothered to flush out all the crap properly.

Thanks for the reply, once I'd opened the boot steam seemed to be on the driver side of the engine but when it first came out the cloud of steam went feet up in the air. It certainly wasn't coming out of the header tank. 

Sorry to say that you can get an hgf where oil and water mix but doesn't give a positive result on combustion gases. It depends on where the head gasket has failed.
The only other possible way to get oil in the water and vice versa is from a previous head gasket failure when the cooling system wasn't flushed properly.