Thank you for the reply.
There is an option to execute an external program when you recieve mail, but no option to execute a program when you have read the new mail. So I can turn the LED on but I can't turn it off!
If I have to make it more complicated and check the status via a DCOP call or similar that would be OK. If no-one knows of an easier way, I will look at the developer docs for KMail.