Rover 25 2.0L TD - Over heating! Water leak! Please help? - Lowliver

Hello there. I urgently need some advice on my car.

Got a Rover 25, 2.0l TD. It overheated about a week ago and upon inspection I noticed the water tank empty. I check the oil and water every month so after it had cooled I filled it up and noticed water dripping from the top of the pipe above the d-clip. I had no choice but to drive the last 15 minutes home. Got home and the water tank was empty again. I ran it for the next 3 days to get to work by just filling the water up every morning ( I know this was probaly stupid but i had no choice, its very early morning shifts in the middle of nowhere) 20 minutes there and back.

Got myself a new water tank from a breakers yard, checked it. it was fine. Fitted it this afternoon with no problems, filled it up and then took it out. After about 10 minutes the temp gauge rose up to the usual half way point and then 5 minutes later it pushed up to the red so i pulled over for a few minutes, it dropped and then I set of again. This process repeated a few times before the temp gauge settled back into the middle but everytime i stopped at lights or a junction there where wafts of steam coming from under the bonnet that side where the water tank is.

Can anyone advise me on this? Is it something I should worry about? Is it just settling in or is it something major going/gone wrong?

Any help is greatly appreciated.