Paypal Standard integration issue please help

Is there anyone who can make a suggestion on how to fix integration issue with the Standard Paypal with Responsive theme 5.2.
If I disable payment gateway and pay using Admin Callback I get a confirmation that payment has been received ok and order is paid in Order Manager.
But when I enable payment with Paypal the payment is processed ok and received within Paypal also recurring payment is set up GREAT (this is with website live setting not sandbox) however I get a payment failure error from my site’s callback page and no orders appear in Order manager.
Any ideas will be much appreciated!