I have 3 wires into the rear of my alternator.
Of the 3 connections, one is smaller than the other two.

Would i be correct in thinking that the small one is a 12v input from the ignition to the alternator to 'tell it to start working' I guess this is linked into the dash light as well.

One of the larger ones goes to the positive side if the battery to charge it.

What does the other large one do? (i have no wire for it anyway).

Alternator

There are three wires coming out of the special alternator plug, two medium Reds and a Blue. The Blue goes to the ignition warning light via the PWS loom. The two medium Reds can be joined together, close to the alternator, and a single heavy Red (supplied in the PWS kit) runs direct to the battery positive (+ve) or to the 8mm terminal on starter motor. (NOT the solenoid terminal) This is a fairly long cable run, keep it away from heat and moving parts. Use the correct heavy duty terminals and crimp or solder, rubber boots are available for the terminals, this prevents accidental shorts and keeps out the dirt etc. For added safety sleeve these wires exactly as per the donor. There is a 4th terminal (the insulated one on its own, thread M5) colour Blue/White, this supplies 12 volts +ve only when the engine is running, and runs directly to the electric choke on the Weber carb, if fitted. The choke will not operate, even under extensive cranking, or with the ignition left on. Once the engine fires and runs the choke will start to open. As soon as the engine stops the choke will start to close. Haynes show a diode in the ignition circuit (Blue wire) to prevent reverse current flow, this is thought to be superfluous
Information taken from........
http://www.colinusher.info/Robin%20Hood/pwswiring.html

also look here...... http://www.seoc.co.uk/alternator.htm

The 2 bigs come united to the positive of the batery and the little one comes to the lamp after the key switch to say if the charge is correct.