Report Server cannot connect to database

[AndyH1]

I'm trying to set up Reporting Services on a win 2008 R2 server, talking to a MS SQL 2008 R2 backend SQL server

I keep getting the error
Report Server Windows Service (MSSQLSERVER) cannot connect to the report server database
in the log file

I have the following set up in Reporting Services Configuration Manager
eportServer Instance MSSQLServer (which when connection clicked connects ok)
Server Account Network Service
Database Credential Service Account NT Authority\NETWORK SERVICE
If I click on change credentials I get
Authentication type Current user - Integrated Security\NETWORK SERVICE
and clicking on the test connection gives success
Clicking next shows Server Credential NT Authority

I have no execution account set up

Looking under services the SQL Server (MSSQLSERVER) service is also using
NETWORK SERVICE

The links are
Report Manager

http://<server

name>:80/Reports
Web Server

http://<server

name>:80/ReportServer
where <server name> is the name of my server

So I'm at a loss what I'm doing wrong, but am getting this error both on a local test VM (where web site and SQL servers are running on the same VM) and on the liuve site, where the web server talks to another server with the backend SQL database on it

If anyone can help I would be grateful

Andy