Hi Bob,

Well you're sort of on the right track.

Do up the bolt until you just can't rotate the outer gear drive by hand, once you've done that back off the nut bit by bit so that you can just have the outer gear free wheel without any interference or drag. Once you've got it at that point you've got it sorted.
Make sure you've got your clutch cable backed right off while you do that adjustment. After that then adjust your cable so as to take out all the cable slack and have it that as soon as you start to pull on the clutch lever that machine wants to move forward.

Cheers,
BB.

I live a 24 Hour lifestyle, but every now and again I seem to fall asleep, well at least that's what my wife tells me.