The possible reason one:

 The problem is in JRE version. It should be version 1.4.1, 1.4.2 or 1.5. I edited file \bin\epoc32\tools\ecmt\config\ to line,1.4.2,1.5,5.0 added 1.6 value,1.4.2,1.5,5.0,1.6

The possible reason two: One thing to be aware of altering the memory size of the s60 emulatorwas causing the timeout. I had it set to 256 mbchanging the value back to 32mb and the Failedto initialise sessionstopped occuring.