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@Skülly
A good workshop or any frame builder can ream it, that might sort it. Sounds well eggy though.
I'd guess the tube is likely to be 27.2 if 531, 27 or 26.8 if more gas-pipey plain guage tubes, given you're talking about an old ish claud b. Not sure what 'level' this bike was sold as. Basic tourer? As they were made by Holdsworth for some time, if you happen to be near south east london you could take it to a guy who could easily have built it, Winston Vaz.