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@turpe
I'd probably just buy a new stem. If there's a lot of height protruding and you have to chop a fair amount off the stem, you'll end up with the bolt sticking up, as there won't be enough thread on the end for it to sit properly.
I don't know if that makes sense - it's hard to explain without pictures.
(EDIT - it's not an older French bike, is it? If so, the steerer will be .2mm narrower than an inch, hence your issues)