Many thanks for your advice. I took him along to the vets. He said he was 90% sure it was a histiocytoma as my dog is only 4 years old, this would be a common occurrence. He advised watchful waiting for 2 months, it would probably bleed, crust over and fall off. So far it has shrunk slightly and looks like it's on it's way out. Hopefully this will resolve but I'll keep an eye on it and thank you very much for your support.
Agree with ginger. No way to tell, could be any number of things and best to have it checked ESP since it has changed.
The best thing to do is take him for the vet to have a look at this. It may be nothing to worry about, but even though it costs a little for an examination, I always think it's better to come out of there assured that this isn't serious, than to hang on worrying about it.
If it was a sting or tick bite inflammation it would surely have gone down or faded since last week. So this needs checking out.