Ok heres the story.

The front brake calipers had seized up pistons and needed new pads so we rebuilt them and put new pads all round. Afterwards the brake level still feels spongy, as in it takes alot of travel, including turning the brake light switch on before any braking happens. When you reach the braking zone the brakes work pretty well but im sure they could work better. So they felt abit spongy.

After a few weeks of this i decided to bleed them, one or two miniscule air bubbles in both sides of the brake circuit (bike has duel disc brakes). This didn't appear to change the feel very much but i couldnt be sure just yet. I also on the same occasion adjusted the brake handle reach, it was on number 3 and i set it to 1 (furthest out) this was still perfectly in my reach. For the next weeks or so the brakes felt fantastic, they came on within a cm of pulling the brake handle in and this allowed for smooth controled braking, their was no spongy feeling either. After the week though they have sort of phased back to how they were before. Even with the setting for the brake level still on 1 i have to pull it at least half travel to get to the braking zone. I don't know whats causing this as there was no air before so i expect there will be none when i try bleeding them again, Also i havn't adjusted the level grab since changing it to 1. I cant believe its the brake adjusted but im not sure. My other thoughts were possible put braided hoses on.

Any ideas anyone, im open to any suggestions.

Il try bleeding them again but i suspect nothing will have changed on the air front.

bleed again or better yet flush the fluid and bleed
rebuilt calipers..... previous known problem.....I'd think about that for a bit

Is your bike parked outside or anywhere where there is condensation?
Is it only spongy when it's cold?

My guess, since this is happening to my bike as well, is that there is trapped moisture in the system, the moisture (water) is absorbed by the fluid, and reduces the effectiveness of the brake fluid.

I think it's fine for a while and then after a few heat cycles (water has a lower boiling point), air bubbles begin to form.

Or, you have air trapped in the caliper block.

The other thing that I have heard Srinath suggest (and others), is to crack the banjo bolt up by the master cylinder and squeeze the air that may be trapped up there.

I've spent 3 hours trying to get a YSR 50 to bleed.............
and I have a miti-vac and old skool.....

I'll admit it kicked my butt

did the same thing the next YSR I put SS line on

I keep it in a garage over night but many nights it is out till about 10pm until it goes in the garage and has a cold ride home. I have had problems with carb icing too but that is due to the carb heaters been removed when it was raced. So perhaps there is a cold/condensation problem as it is rode home in freezing weather then put in a 'relatively' warm garage overnight. It needs a new front tyre so maybe il splash out on some SS hoses and that will also make me put new fluid throughout the system.

What sort of condition are the brake lines in? OEM ones can go soft after time and "Baloon" under pressure. Bleeding brakes with the engine running can be a help, the vibrations  can shake loose those little bubbles that get trapped and wont shift. I was bit sceptical of the fact but I tried it last time and it was a definate improvement.

Il give it ago sledge. Well the brakes should be fantastic. However the bike was raced and has goodridge steel brake discs, so they loose their perfect surface within a day or so but after a 
couple of minutes of use they come shiney again. They should be great, however im thinking writing that this that maybe the brake lines have had a hard life and stretched due to lots of heavy braking on the track. Im going to flush the whole system out in the next few days and go from there.