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@mooks
Depending on how old/cheap it is, it may turn out that the stem has fused to the forks - happens a lot with aluminium stems and steel forks, especially if the bike's been left outside or ridden in really crappy conditions, and they haven't greased or copper-slipped the stem before putting it in.
I've heard people mention caustic soda in the past, but I think that's a last resort (i.e. it'll melt your stem). I had a similar problem about a year ago and ended up hacksawing the stem off. When I got a closer look at the forks it was well and truly fused.