The temperature reading on my build has been causing me problems. The temperature gauge (on the donor instrument pack) jumps to half way when the ignition is first turned on, then as the engine runs, the needle moves gradually into the red, then holds on the end stop. The thermostat is fine. The fan comes on and goes off when the engine gets hot. But the temperature reading is wrong.

The temperature sensor on the head is a 4 wire device. I only have the manual for the 125Cc donor, not the 250, and the diagram only shows a 2 wire sensor. any idea how a 4 wire sensor works and what might be wrong?

Four wire temperature sensors typically have two electrically separate sensors within the package, one for the ECU, the other for the dashboard gauge.

Based on what MikeRJ just posted it looks like the two sensors in the unit have different resistance values.

Try swapping them over.