You can add this code to the userChrome.css file below the default @namespace line for the side bar.

@namespace url("http://www.mozilla.org/keymaster/gatekeeper/there.is.only.xul"); /* only needed once */

/* [PROTON: SIDEBAR] */
@media (-moz-proton) {
  .sidebar-placesTree treechildren::-moz-tree-row { min-height:22px !important; }
  .placesTree         treechildren::-moz-tree-row { min-height:22px !important; }
}

/* [PROTON: MENU] */
@media (-moz-proton) {
  panelview toolbarbutton { padding-block: 0px !important; }
  .panel-subview-body { padding-bottom: 10px !important; }

  menupopup > menuitem, menupopup > menu { padding-block: 0px !important; }
}

• https://www.userchrome.org/what-is-userchrome-css.html
• https://www.userchrome.org/how-create-userchrome-css.html

In Firefox 69 and later you need to set this pref to true on the about:config page to enable userChrome.css and userContent.css in the chrome folder.

• toolkit.legacyUserProfileCustomizations.stylesheets = true

• https://www.userchrome.org/firefox-changes-userchrome-css.html

Thank you for the reply. I created a .ccs file and added the above. Set toolkit.legacy to true and tried changing all the parameters and no change to bookmark spacing.

Not clear if the first line is part of the .ccs file @namespace url("http://www.mozilla.org/keymaster/gatekeeper/there.is.only.xul")

Also you say add the code below default @namespace line for the side bar, not sure what this is.

Does the .ccs file need any other information apart from above. Sorry I am not the sharpest tool in the box when it comes to code configs.

Many thanks Adrian.

Note it is .css (you mention ccs). The namespace line is the one you quote; it isn't needed.