I am replacing an old Satchwell room thermostat with a Programmable Drayton Digistat +3. The Old Thermostat has three wires 1 red , 1 Blue and 1 Yellow.

The Drayton Digistat requires only 2 Wires. Can someone enlighten me as to which 2 wires to use.

No colour coding is given with the directions. Terminals are marked-
One is marked 'C', One marked 'ON' and One marked 'Off' . The 'OFF' is not used.

I purchased it because it said easy to fit only 2 wires.
Any help would be appreciated.

More info needed-what type of system, brand/model of unit, heat-only? Find where the thermostat wires connect to the unit - are all three used? If so, your new thermostat is likely not compatible with your system.

http://invensyscontrolseurope.com
The boiler is an Ideal Fanned Flue Gas Boiler NF250. It is switched On and Off for Central Heating by a Motorised Valve which also turns on the boiler as it reaches its fully open point. When the room thermostat closes the motorised valve starts. (The Hot water has its own valve operated from a thermostat on the hot tank.)

Invensyscontrolseurope.com contains Instructions for Digistat +3.

If the original t-stat uses 3 wires, it suggests that the zone valve must also be powered to the closed position, and the new t-stat may not have that capability.

You probably have a White Rodgers zone valve and will need a thermostst(3 wire) type to make it work.