fluffheadman Hi there. Google Play Services doesn't need SMS permission to run WhatsApp. It asks for it only once but you don't need to give it. Google Play Services is trying to read your SMS so it can auto fill your SMS confirmation code when you set up WhatsApp. Just ignore the request, wait for the SMS code to arrive and manually copy it into WhatsApp.
P.S. these days group chats are end to end encrypted in WhatsApp.