Installed but, Error: Could not connect to the database

Hi,

I've installed ok and am up to step 3 to choose admin username and password but it's returning this:

Error: Could not connect to the database please make sure the database server, username and password is correct!

The install has created all of the fields so the username and password must be correct that is why i'm onto step 3, administration.

I've gone over the settings, i'm testing on localhost, the username and password is correct in phpmyadmin and the database is too. My sql can see the settings.

So why am I returing this error????