If the route to the TE endpoint is via the TE tunnel then surely the TE will would never be established as the route to the TE endpoint would be unreachable?
Not necessarily - like I said, if you use at least partially specified path for TE tunnel, any router in path does not need to have route to other end - it just needs route to next hop in path. Consider network of 4 routers in row: R1-R2-R3-R4, where R1 and R4 are endpoints of TE tunnel. Normally, R1, R2 and R3 would need route to R4 to establish TE tunnel, but if on R1 you specify tunnel path as R2,R3, R1 only needs route to R2, R2 to R3 and R3 to R4. If you specify path partially as just R2, then R1 needs route to R2, but R2 and R3 need routes to R4.
So assuming the core network consists of core routers with TE tunnels and an edge network of edge routers with VPLS tunnels are you saying the whole core network has to contain edge network routes?
My previous replies apply to the case when VPLS endpoint and TE endpoint is the same router. If both tunnels are not terminated on the same router, setup gets more complicated (unnecessarily perhaps). You will still need complete LSP from one endpoint of VPLS tunnel to another (from "edge" to "edge" - established by either TE or LDP), even if this LSP will traverse "core" TE tunnel, so you will have VPLS-over-TE-over-TE in your core network. If you have some specific setup in mind please describe it so we can discuss it in particular.