Anyone heard of Marlboro bikes?

FUCK IT!

That bike I bought a week or two back:

is annoying the hell out of me.

I didn't get chance to do anything to it until a few days ago. I can't for the life of me get the back wheel to fit in the frame. I think its not the original wheel. I can't think of any other explanation. If I put the wheel at the very back of the dropouts I have a mm of clearance either side of the chainstays. This wouldn't be such a problem if I had a perfectly true wheel and the chain could reach that far back. As it is the wheel is old and not true and the chain isn't quite long enough so I have to move it in about 10mm which means the tyre rubs against the chainstay. Awesome.

Also wtf is it with really tight clearances? Its not a bloody track bike. Its a city bike. I need to figure out which size wheel is smaller in diameter and narrower. Only trouble is this wheel is the smallest of the 26" imperial sized wheels and a metric version (basic MTB size) is too small.

To further complicate matters the front wheel is a couple of mm's bigger in diameter and slightly narrower so they aren't interchangeable.

I'm giving serious consideration to just bashing the chainstays in with a hammer. Its a steel frame so can take a bit of a battering, I just don't want to hit too much and end up with an ugly weak spot.

Technical bit:
Current rear wheel: 26 x 1 3/8 (E.A.3) 590 mm
Current front wheel: 26 x 1 1/4 597 mm
Classic MTB wheel: 26 x 1.00 through 2.3 559 mm

If I can I'm going to try and get hold of some wheels in this size:
26 x 1 (650 C) 571 mm - I know you can get them but they may prove hard to find.
Also they'll be a bit sporty for what is essentially a relaxed town bike. AND I don't even know if the brakes drop far enough to make contact with the rims.

Thing is I only paid £40 for the bike. I bet I end up spending way more than that on the wheels. Is it worth it? Probably not.