Even if a less worn out headset (or one with slightly different manufacturing tolerances) screws onto your steerer, the steerer threads do look tired as others have pointed out. That headset may also slip under stress / shock at some point, and you may not be able to tight it properly to start with.
If you're London based, Winston @ Varonha can sort out your forks (unless there's more damage other than the threads, though it doesn't seem the case), he's reasonable cost wise, and will do a great job. If you're after greater clearance you can also discuss whether your current forks can be modified and look into improving clearance at your frame's rear triangle if needed.
Looks like a nice frame worth keeping...
Even if a less worn out headset (or one with slightly different manufacturing tolerances) screws onto your steerer, the steerer threads do look tired as others have pointed out. That headset may also slip under stress / shock at some point, and you may not be able to tight it properly to start with.
If you're London based, Winston @ Varonha can sort out your forks (unless there's more damage other than the threads, though it doesn't seem the case), he's reasonable cost wise, and will do a great job. If you're after greater clearance you can also discuss whether your current forks can be modified and look into improving clearance at your frame's rear triangle if needed.
Looks like a nice frame worth keeping...