New hard drive - Trouble restoring from Time Machine

I fitted a new 1TB hard drive today. That went smoothly, but I'm stuck with restoring from my time machine backup. It's on a partitioned external drive via thunderbolt (I also tried via the USB lead, but had the same problem).

I started up with the cmd and r keys held down. I get a folder logo, then a grey circle with a cross through each time I connect the drive. My old Mac can see it ok via USB (a PowerBook G4).

I've also tried to reinstall the OS from the Internet, but it won't accept the password for my router. I've checked it with my phone and i'm sure it's correct.

I'm not sure what to do. Have I missed a vital stage, like formatting the new hard drive? If so how would I go about doing so?

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Forgot to mention, I use OS X El Capitan

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Yes you first have to format the drive GUID then Mac Extended. Bypass your router with a hard wired ethernet cable for now. I'm concerned about your hard drive IR cable being good. Why are you replacing the drive?

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Thanks @mayer. Yes, the old one is ok but would like more space. It's a Toshiba 1TB drive, direct from Amazon. I bought the one listed under my laptop in the iFixit store.

Good idea with the ethernet cable, it's asking me to choose between a few things. Should I choose Restore from Time Machine or go to Disk Utility?

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After you have it formatted, restore from Time Machine is fine. Or you can first install the latest system, do your system updates, then use Migration assistant.

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It says Mac OS X Base System on the left there. When I select that under format it says Mac OS Extended in grey. Does that mean it's already formatted? Or should I format the whole thing with 'erase'. Thanks again, new to all this.

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Ah I get it now.

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Worked out what the base system was. The penny drops. Restoring now.

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Tom will be eternally grateful.
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