"Was it a mistake to use a combined primer and undercoat?" ----> Yes you need to use a stain intended for applying to external bare timber.
You will have to remove all the old paint - try using a pressure washer.
paint will not adhere properly to a stain. was the timber exterior grade? if it is pressure treated timber it cannot be painted. unseasoned timber cannot be painted either. many hardwoods, teak in particular, will also resist paint. best to stain it.