I have a mpeg source video which I've edited down to 1hr duration.

If I enter exiftool *.mpg on the source file I get the original file information below:

File Size : 1888 MB
File Modification Date/Time : 2008:10:05 15:19:55+01:00
File Type : MPEG
MIME Type : video/mpeg
Image Width : 720
Image Height : 576
Aspect Ratio : 16:9, 625 line, PAL
Frame Rate : 25 fps
Video Bitrate : 8000000
MPEG Audio Version : 1
Audio Layer : 2
Audio Bitrate : 256000
Sample Rate : 48000
Channel Mode : Stereo
Mode Extension : Bands 4-31
Copyright Flag : True
Original Media : True
Emphasis : None
Duration : 31:58 (approx)
Image Size : 720x576

The original duration of the file was about 1hr 5 minutes. Ideally I would like to keep the file size as it is and retain the quality as close as possible to the original. i appreciate that re-rendering video always causes a loss in quality but I want to keep this to the minimum.

How would I go about working out the best rendering settings?

First, you should use a project setting that closely matches such as DV/DVD PAL Widescreen. Then, it depends on what you want to do with the rendered output. If you want something similar to your input, the DVD output or MPEG-2 8000k should work.