When changing oil in final drive I noticed a white colour oil indicating water presence. I changed oil regardless after cleaning out inner casing. Theres is a small weep from casing near upper part of casing.next to disc rotor. Should I replace outer oil seal and large O ring many thanks in advance Coopz

Yes the orings compress with time and need replacing very cheap even from your local BMW shop
Halo

Also check that the O-ring at bottom of the breather is undamaged, and the small hole in the breather is facing rearwards.

Early models didn`t have this O-ring (and small hole), and it was a problem with water entering the FD via the breather.

This mod was done somewhere late -84.

Many thanks guys for replies I'll check that out Coopz