Have trawled through groups but can't find a definitive answer to my
question.

I have a 60W transformer and want to run 3 x 20W low voltage lamps from
this.

The transformer is "terminated" having three sets of terminals built in
so I can connect cables to each 20W light.

The cable running to each light is 1.5m long.

For cable size calculations do I need to take the total load of 60W (3
x 20W) and the total cable length (3 x 1.5m lenghts = 4.5) or simply
the load for each light (20W) and the cable length to that light(1.5m).

Using TLC's Low Voltage Lighting Cable Selector, I get a cable size of
2.5mm for the first way, and 1.0mm doing it the other way.

Which is correct?

TLC have a note at the end that says: The actual cable size and runs
required to connect several lamps to the same transformer output must
be equal to or greater than total load of the run

....but I think this refers to a single output where one cable runs to a
junction box serving several lights.