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When it is put into reverse it cancels out the brake lights? Don't know how as those 2 are on a seperate circuit.

You probably need to adjust the neutral safety switch on the trans to get the reverse lights to work. Well that is if you have a C6. I would also bet money that only about 15% of the 78-79 Bronco's have functioning reverse lights, it is a common problem that goes wrong with them but very easy to fix.
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