Its greyed out when I try to import it & when I two finger click on it and it gives me the option to 'open with' photos.app it responds with 'Nothing to import - None of these files can be imported into your Photos library.
You cannot import photo libraries to Photos, you have to open them with "Open with".
If ctrl-click and "Open With" does not work, it may be a permissions problem or your library may be on an unsupported drive. Where is the iphoto Library stored, that you are trying to open? Is it in your Pictures folder or on an external drive?
Which version of iPhoto created it?
The library is my pictures folder on my Macbook Pro 2013 hard drive
It was working fine in the latest version of iPhoto
I have read/write permissions
That suggests that either the photo files are already in the current Photos library or they are in a format Photos doesn't understand, like old style QuickDraw Picture files (ones with the .pct extension).