The last couple of mornings and one morning a couple of weeks back the low coolant/coolant temp light came on after starting the car. Engine temperature (while running) and coolant level are ok. Two things I noticed:

1. It only came on on cold days (like today)

2. If I added a little water to it (even an 1/8th of a cup) it goes off

Is this a fault with the sensor or could it be the coolant contracting possibly (if it can that is)?

if the coolant level is going down enough to require topping up , you may have a leak somewhere , and possibly a faulty/too sensitive sensor aswell

what engine is it ?

Based on what happened to my engine all I will say is get it checked & sorted before damage occurs. Mine is costing me an absolute fortune, where it may just be a very simple and minor problem that can be sorted.

Seriously, get it sorted asap

I had exactly the same thing yesterday - 1.4 MPI - Adde a half a glass of water and the light went out

First time I have had to top u i the water in over a year .

Its a 1.4 8v. I'm now thinking its the cold weather causing the coolant to contract/setting off the warning because it didn't go on last night (reasonably mild evening) but it came on this morning (another cold morning). After getting it up to temperature (while getting to work), then switching off and then restarting it the light didnt come on. I also found a post on a vw forum about coolant lights coming in cold weather and there not being a problem with the level or sensor.

Two things I noticed:

1. It only came on on cold days (like today)

2. If I added a little water to it (even an 1/8th of a cup) it goes off

Is this a fault with the sensor or could it be the coolant contracting possibly (if it can that is)?

It's not just a poor connection on a sensor is it? When you open the expansion tank to top up you might be moving the wiring and/or a connector which makes/breaks the circuit.

Dont think so, the last time the expansion tank was opened was yesterday morning when i added a little water, so what happened today wasnt connected to opening the tank.

Heres the post I was reading:

VWvortex Forums: Coolant low? Cold temperatures? Here is why!

if you keep having to top it up , i suspect you have a leak

if you top it up when cold to between min and max , and the next morning its below min level again, the water has gone somewhere , start looking for pink staining on hoses, sensors and water pump