Mechanical fault, usually caused by oxidisation of the mode switch - creating increased resistance between its wiper and its internal contacts. Try cleaning the mode switch (under the VCR mechanism on the main board) using a commercially available electronic cleaner (after first unplugging unit from power point, and carefully removing top and front covers), rotating the switch wiper gently in each direction, let it sit for a few minutes, refit the mechanism, ensuring all is reconnected to the board, plug unit into power, test.
The other option if the cleaning doesn't work, is to order and replace the mode switch with a new one - these are not expensive parts, and should be available from Panasonic directly. Make sure you quote the model number of your unit to the spares supplier before obtaining any replacement parts, including the mode switch as required.
BUT: try the simplest and cheapest option (cleaning the mode switch) first. See how you go.
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