I have the opportunity to contribute a chapter to a collected volume of essays based on a conference that i spoke at a while ago. The chapter is written and good to go - I was originally going to submit it to a postgraduate journal, but my supervisors advised that I should hold out for something better.

However, I reckon that if I was to spend a bit of time re-writing it, it might have a chance of being accepted by a high quality peer-reviewed journal - the trouble being, I don't see how I woud be able to make the time to do that until some point mid next year.

I'm tempted just to let it go the the edited volume, than at least I have a publication in the bag, even if its not a particularly high profile one. However, I would also like to use this material in my monograph (have just submitted the thesis and am thinking about writing a monograph proposal in the next few months). Will publishing as a book chapter ruin my chances of being able ti use the same material in a monograph?

Unlikely. I think you'd have to publish substantially more material from your thesis to deter them. Hypothetical publishers might ask you to re-write the material a bit so that it could be described as 'drawing on X chapter in Y book', rather than saying it was published as is in another source.