OK. This is now all working. For anyone else who wants to use TFTP+NFS:
in /nfs/exports we need to use the no_xxx_squash options else both root+normal users get mapped to nobody
without both options set neither root nor normal users can log in
/home/path/to/rootfs (rw,sync,no_subtree_check,no_all_squash,no_root_squash)
BTW the NFS host here is Debian which appears to default to all_squash.
~$ uname -a
Linux debi7 3.16.0-4-amd64 #1 SMP Debian 3.16.7-ckt11-1 (2015-05-24) x86_64 GNU/Linux