Thanks fellas for the comments. Painting is my only strong suit. When it comes to tracklaying, layout design, benchwork, electrics [aaaarrrgghhh] etc you have it all over me!
Anyway I thought I might post a couple of step by step pics of how I go about it. Maybe someone will find it helpful.

My materials - cheap brushes, cheapish tube acrylics and a very fine mist sprayer [old pump action air freshener]

Blue high sky [blue + white] and paler and warmer low sky about to be blended.
For the low sky I started with a big puddle of white [acrylic primer works well] and carefully added tiny amounts of yellow and red to it.

If the blue has dried before you're ready to blend the two, you give it a good spray of clean water with the mist sprayer. I can't get by without it when using acrylics. Blend the two together with a soft big brush

Mix up some slightly stronger warm colour and add vague clouds down low, with maybe some whiter edges
Blend the edges away, using a soft brush - the one I used for this job was about 1 inch wide - and using more fine mist if needed. Fingers do a good job too, but as I said earlier, wash ASAP.

Last job on the sky was to reintroduce some blue back into the clouds. This helps them to settle down into the sky because they share the same colour.

Seeing as this thread is about sky I'll stop there. For what it's worth, when I get around to painting my backscene for my New England layout I might post a step by step in case someone finds it useful.
Mike