Lens won't retract and I get an error message saying 'focus error'. Have tried turning off and then on again, also removed batteries and replaced. But no luck.

Your camera has a lens error, this is such a common fault that I hope you don't mind me pasting my stock generic answer below. No point in reinventing the wheel!

Stuck lenses are probably the most common reason that compact digital cameras get thrown away, but there's a fair chance of recovering use of your camera again

The fault is commonly caused by dirt or grit blocking the mechanism, or due to it having suffered a recent fall. Another common cause is that the camera was in a pocket or bag and the power button accidentally activated and tried to open the lens against resistance. The mechanism may have simply become dislodged or there may be parts which have broken.

If your camera is still under warranty and has definitely not been subject to misuse then contact the Fuji service department in your country to find out about a free repair. If the warranty has expired though a professional repair will far exceed the cost of replacing your camera. You will therefore have nothing to lose by trying to fix this yourself.

Please click here and you will be taken to an excellent article provided by the Camera Repair website. For the most part, you'll be guided on how to physically manipulate your camera to try and clear the fault. Although the article mentions Canon a few times, the advice applies equally to all cameras with lens errors and is not model-specific.

If the link doesn't work then cut and paste the following address into your browser:-

http://camerarepair.blogspot.com/2007/12/fixing-lens-error-on-digital-camera.html

Good luck, I hope you manage to use this information to fix your camera, or at least are able to use the information to help decide whether to buy another camera. If you do decide that you have to throw your camera away then don't forget to remove the memory card as it can be used in other devices. Please take a moment to rate the speedy and free answer I have provided for you and any testimonial which you might wish to add is always welcome.