Thanks everyone for the ideas.
We already do Beavers and that has helped a little - it is just taking time and it doesn't really help that no one in her year does Beavers so she has no real friends there whereas most of the others know several from school.
The teacher is a wonderful teacher and I am sure she is helping dd - she was not as blunt as the way I put it, but dd just latched onto those words iyswim. She is very shy and would rarely talk in groups, or to adults generally; she is much better but still shy so when she is talking to adults she behaves in a very silly (immature!) way - high pitched voice, not full sentences etc
I like the idea of drama class or dancing but cannot find one locally that is not fixated on competitive shows which would not be good as she is far too competitive and hates losing!
I had not thought about 'shy' children having a high level of self awareness making them self conscious - I am sure that is correct about dd. We had a bit of a chat and she is definitley wary of failing so will not always try new things.
In a lot of ways she would be better in a lower year, being the oldest - she plays very well with ds's friends in Yr 1. She is great with my 2.5 yr old neice, but often reverts to being the 'baby' when with her older cousins
Dh and I have decided to try and do lots of fairly grown up things with her, like museums (which she loves ) and she also wants to go shopping for clothes . We haven't really done this in the past as ds would hate such things but i realise now that is being unfair to her
We have parent's evening next week so hopefully I can get some pointers from the teacher too