vivhan on "Database errors on new install"

I'm getting the following error message in the apache log files when i attempt to make a new site:

WordPress database error Table 'wp_mu.wp_3_options' doesn't exist for query

The page itself just goes white and you have nothing displayed when you click create new site.

Database was setup as follows:

DROP DATABASE IF EXISTS wp_mu;
CREATE DATABASE IF NOT EXISTS wp_mu;
GRANT ALL PRIVILEGES ON wp_mu.* TO "wp__mu"@"localhost" IDENTIFIED BY 'password';
FLUSH PRIVILEGES;

I've added the following lines to WP-config.php

/* Multisite */
define('WP_ALLOW_MULTISITE', true );
define('MULTISITE', true);
define('SUBDOMAIN_INSTALL', false);
define('DOMAIN_CURRENT_SITE', 'wp.mydomain.com');
define('PATH_CURRENT_SITE', '/');
define('SITE_ID_CURRENT_SITE', 1);
define('BLOG_ID_CURRENT_SITE', 1);
/* That's all, stop editing! Happy blogging. */

.htaccess contains:

RewriteEngine On
RewriteBase /
RewriteRule ^index\.php$ - [L]

# add a trailing slash to /wp-admin
RewriteRule ^([_0-9a-zA-Z-]+/)?wp-admin$ $1wp-admin/ [R=301,L]

RewriteCond %{REQUEST_FILENAME} -f [OR]
RewriteCond %{REQUEST_FILENAME} -d
RewriteRule ^ - [L]
RewriteRule ^([_0-9a-zA-Z-]+/)?(wp-(content|admin|includes).*) $2 [L]
RewriteRule ^([_0-9a-zA-Z-]+/)?(.*\.php)$ $2 [L]
RewriteRule . index.php [L]

I'm stuck and have no idea what the problem is. The MySQL user seems to be able to create the inital site with no issues. However multisite wordpress sites seem to fail.

Any help would be greatly appreciated