RTC compare errors- Compare editor not initialized

We are starting to use RTC 4.0.3 and came accross and issue when doing a compare.

The RTC Ecplise client is installed on a RedHat 6.4 box and the user  remotes into it using Mobaxterm. In RTC client he changed a file in his sandbox and tried to do a compare of his local file to that in the repository only for it to fial with a popup "Compare editor not initialized" 

Is there some additional config required in order to do a diff?

The RTC setup is the default install and we have not defined any external diff tools to use.

Norm