Hi all , this is my daughter's car 1.2 mk6.5  and it had immobilizer issues before where it would do nothing then start ok , now it starts ok most of the time but if you waggle the key when the engine is running it sometimes cuts out and the immobilizer light flashes , is this a worn key , worn barrel or something else , I did swap the transponder reader about 9 months ago when it had problems before , any help great fully received as my daughter is moaning like I have cut her arms and legs off . 

Does it do the same with the spare key. Immobilizer worked from key signal, Nothing to do with lock/barrel.

Has the key been mistreated chucked on the side at night when returning home from going out/stood on etc.?

If the barrel is very worn I suppose the chip could move far enough away from the pick-up ring to lose sync.  If you've got two keys, hold the spare one against the pick-up ring while waggling the one in the barrel and see if it still cuts out.

Why waggle when engine running?

4 minutes ago, CraigJ123 said:

Why waggle when engine running?

I did wonder that lol, presumably the key is getting waggled by centripetal force as they're going round corners and the weight of a keyring pulls it side to side.

Never come across worn barrel. The pin tumbler mechanism would stop key from turning.

It's a Tibbe key, you can start these with a teaspoon handle as they age!