I have aTdi 1999 with climate control rather than aircon.The problem is when it is on external air rather than recirculating there is a damp air smell.The car has stood outside and was not moved for about a week.

Could somebody suggest what the problem might be?

Bacteria in the system. Your dealer can spray it with some "stuff" (name is something like "Forte") to kill it off. Prevention measures for the future include turning the aircon off (switch from auto to econ) shortly before arriving home to dry out condensation from the system.

More info from the archives in this thread.