As Tom suggests, temp tables seem not to work so I've created and dropped a normal table, I've posted my complete code below incase it'll help anyone else.

USE [misc]

GO

/****** Object: StoredProcedure [dbo].[sp_50NewPostcodes] Script Date: 11/04/2013 10:28:34 ******/

SET ANSI_NULLS OFF

GO

SET QUOTED_IDENTIFIER OFF

GO

Alter PROCEDURE [dbo].[sp_50NewPostcodestemp]

AS

IF OBJECT_ID('Results') IS NOT NULL DROP TABLE Results

CREATE table Results(

postcode varchar(10),streets varchar(2000))

;

with cte as

( SELECT TOP 50 postcode,streets FROM postcodes TABLESAMPLE (0.1 percent) WITH (ROWLOCK, UPDLOCK)

where Streets is null ORDER BY newid())

update cte SET streets = 'Picked up'

output inserted.*

into Results