Ive gotten to the statue of Merinda but I dont know how to activate the quest, she wont start talking. Do I have to complete a quest before this??

You need to obtain this stone and place it on the alter. I believe you can find the stone if you follow the Companions quest line.

I haven't joined the Companions yet Meridia spoke to me, I think it's a level cap.

Because I know she tells you where the beacon is once you get up there. If so what the level cap?

If she spoke, I think the quest has begun. According to http://elderscrolls.wikia.com/wiki/The_Break_of_Dawn it's level 12.

She should speak to you and ask you to find her orb to begin the quest. Great quest and reward by the way.