Permalink issue after wordpress Multi Site Migration

I have migrated 3 WordPress sites over from a shared server to a dedicated server.

The first 2 migrations were normal WordPress sites (no multi site) and the permalink structure seems to work fine. I noticed that the htaccess file is not in the root folder here and it still the mod rewrite works fine.

However the Multi Site migration is having problems with the permalinks, I get server side 404 errors. I have copied htaccess in the root. Default link structure works however as soon as I change it to /%postname%/ i get the server side 404 errors.