Doing Backups with Time Machine

Entering Time Machine I see the external drive that I selected to use for my backups. The problem is the drive is greyed out. I therefore have no access to the backups from Time Machine itself. In order to see the backups I have to go through Finder where the drive is not greyed out. Also when I open my Time machine I am shown everything on the left ( backup drive greyed out) and the "Desktop" is selected.
I am running an old Mac with 2.66 processor and 2 TB internal on the latest Yosemite. I have selected to be advised when the oldest backup is deleted to make room for the latest backup. Now I get the message that backups are failing with no explanations...
Can anyone explain this behaviour?
Mozthedog

Check the external drive using Disk Utility by doing a verify and repair if necessary. Time Machine will refuse to backup to a drive which is defective or has errors in need of repair.

Permissions are fixed and disk is verified and repaired. Disk utility has not found any errors or faults on the external drive and yet Time machine fails to backup. A full backup is larger than space available but should delete oldest backup to accommodate .
Still in a quandary ....
Moz
Thanks again for your reply