Okay, i have made a model made with part of it animated (hence part of the collision is anim static)

trouble is the collision that is anim static isnt working right in-game. The collision is there, I can shoot arrows into it and cannot walk through it. However if there is an item on the other side I am able ot pick it up....the collision does not block the crosshair...

is there any settings for this?

I'm not sure there is anything wrong with your collision, that is, something undesirable that can be fixed. In my experience, a collision mesh in Oblivion does not preclude interacting with something on the other side. For example, in exterior houses (where the "interior" is part of the exterior cell), if you are inside and there is an ingredient flora near the wall on the outside, you can pick the flora from inside. This is true for static collision meshes, both MOPPS and not.

The reason i ask is because this is meant to replace one of bethesda's static, on thier static you cant reach through, but on mine (with similar modelled collision) you can reach through...

Is there any way you can make the new thing an activator and set up an onactivate script on it that does nothing. That should prevent activating the thing on the other side of it.

doesnt make a difference.