Hi, so as you push down on the pedal, a fountain of fluid appears?
That sounds like the rear seal on the master cylinder piston has gone/is going. Typical system: a sprung-loaded plunger with a seal, running on/in the main piston (or a floating-sprung seal arrangement clipped onto the rear of the main piston plunger), that seals on the rear face of the M/C as the pedal is pressesed, locks a volume of fluid in the m/c chamber. This fluid is then pressed down the brake lines to actuate the brakes.
When the brake pedal is released, there is no force on the small rear seal, this allows the fluid to return to the reservoir of its own accord and under the small force of the brake pull-off springs at the wheel cylinders.
With fresh fluid in, gently/slowly pump the brake pedal. Have a look at the fluid, if there is black fluid appearing or a black swirl/trace of fluid from the intake hole in the bottom, the seal is disintegrating.
Worth a check, but thats what it sounds like to me.
Alec.