If there is nothing for him to damage, or for him to chew or ingest that is going to hurt him ie its safe, if he should pee its easy clean, then tbh I cant see the problem, you could just leave the crate door open and the bed and the t-shirt in there. Did you try a large soft toy? that sometimes helps. You may find that he will settle in the crate with the door open, but not closed as long as he has the option to come out if he wants. (this is assuming you close it at the moment now of course). Sometimes dogs like it is you put a throw or blaket over the top and sides making it like a secure den, another thing maybe to try if you havent already. If you have been leaving the door of the crate open anyway then just leave his bed outside.

Dont know if I mentioned it before but DAP Dog appeasing pheromones can help, they are called adaptil now, It works like a plug in air freshener but emits artificial version of the calming and soothing dog pheromones, does help settle and caml a lot of dogs, I still use them for fireworks and times of stress, and there has been some successes with crying unsettled dogs.
You can get them at vets and pets at homes too I think, I found cheapest place is on line I get mine from Online Vet | Get Cheap Pet Medicine and Treatments Online From Vet-Medic - Vet-Medic if you want to have a look, may even get them cheaper on other sites. Post is free unless you want 1st class and you just pay the extra.

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thanks ever so much for the replies
Think I am defo gonna go for it without the cage at all tonight,if we have his bed in the cage then i am sure he would just sleep on the floor and not go near it, he is quite happy left in the kitchen so I will see how it goes tonight if it is bad again I will definately look in to a spray, its a shame because every single other aspect is going so well (toilet training , clicker training etc) i=he has even stopped nibbling the kids!!! this is most important to get sorted though . Its so frustrsting having 2 babies sleeping and being kept up all night by the wee dog !!!!!!
Fingers crossed for tonight

also its more of a worry when he is in his cage then what damage can happen in the kitchen, last night he moved his cage from one side to the other by crashing in to it over and over!!!

Just crossed the fingers for you. I'll take it as read that you already checked that if he somehow manages to open a cupboard door there's nothing he can get out like a plastic jug or anything nasty that he could have an exploratory nibble on

Yeah already baby proofed

Well...
Last night no cage and we had to wake him for a wee at 8 a.m dry clean kitchen too !!!

Fantastic, thanks for the update. I hope that's you all sorted. I'm afraid we are still having an issue so I'll start a new thread.