Thanks for getting back to me Luca.
I have tried the update again. Again the widgets all disappear. When I re-add them I get messages where they are like:
File not writeable: /var/www/vhosts/earthingfaith.org/httpdocs/wp-content/plugins/special-recent-posts/cache/NTA1MG5vdGVzdEVGLXNxdWFyZS1mYXZpY29u.png
Problem detected on file: /var/www/vhosts/earthingfaith.org/httpdocs/wp-content/uploads/2012/08/testEF-square-favicon.png
In the plugin page of the dashboard I also get the message: Special Recent Posts FREE Edition Warning! The Cache folder is not writable. In order to use caching functionality you have to set the correct writing permissions on special-recent-posts/cache/ folder. E.G: 0755 or 0775
I have checked and the write permissions for the cache folder are 0755.
I’ve left it live with the error message for now so you can see.
Any ideas?