I will try and give you possible answers to your questions based on my being in exactly the same situation.
H does not seem keen that I file for D - not really sure why if he ultimatly wants to be with her?
My H blanched at this as well. It's because it smacks of reality, which of course plays no part of the affair bubble. Doesn't mean they don't want to be with OW, they just don't want to accept the consequences of their actions.
Again why does he not want to move out if his ultimate intention is to be with her? Would she not be encouraging him to move out?
At the moment their relationship is the highlights. You get all the shit. They know as soon as any element of real life kicks in, all the petty arguments that arise through living together, their perfect fantasy is in trouble.
But - if he stays I continue in limbo - can i realistically live with him knowing he is seeing someone else?
No.
Does him living here help his relationship with her - give him time and space to take their relationship at their pace (dont want to be part of that!)
Yes, it absolutely does.
or does him living here put a strain on their relationship (if i was ow i would not be happy with arrangement and would feel insecure about if he would ever leave etc)
She was perfectly happy to be seeing him while he was living with you for all this time. Don't try to get inside her head, hopefully, as a half way decent person, you wouldn't be able to.
does he have a master plan - is he staying here because it suits him, is he deliberately manipulating me?
Yes. He knows which side his bread is buttered. Who wouldn't want a wife/child minder/housekeeper to do all the work, and a girlfriend to have all the fun and sex with?
is he really in love with ow? or has he got caught up in the whole situation?
is he still in the infatuation stage or gone past that?
Whatever sordid, pathetic, insubstantial, lustful feeling that passes for love in these situations, that's what he's experiencing. The one thing that you can rest assuredly in, that real love, which is self-sacrificing and puts others first always, never hurts, never causes pain- what they have ain't it.
will she be putting pressure on him - how much of this is she controlling?
I doubt it. Sounds like she's as happy with their highlights relationship as he is. Don't let them have it.
Sorry I couldn't be more pairing for you HMH, but for me that's just how it is :(