Many thanks Michal, the issue lay in the neo-app.json file.
The welcomeFile property was incorrectly configured to /webapp/index.html, when it should have been /index.html.
The index.html correctly resides above the /webapp folder.
The Fiori launchpad functions correctly now.
This may possibly be a bug in the basic SAPUI5 application project template currently available through WebIDE.
The template generation information from .project.json is:
"generation": [
{
"templateId": "ui5template.basicSAPUI5ApplicationProject",
"templateVersion": "1.32.0",
"dateTimeStamp": "Wed, 09 Mar 2016 15:45:58 GMT"
}
],