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@retrodicorsa
Some old British frames would have taken smaller rear (possibly Imperial, as in inches) axles originally. The standard modern metric rear axle happens to be a bit larger then the standard Imperial size. You either have to enlarge the drop outs or file flats on the axle. The latter should not be an issue as long as you do it carefully and don't round off too much of the thread (i.e. make sure the flats are flat and remove only the smallest amount you can). On the other hand, unless you are a purist you are unlikely to ever find the correct axle again so could mod the frame (carefully). Removing metal from the LOWER edge of the dropout makes more sense as you are less likely to affect the alignment of the wheel assuming you tighten it with the bike sitting on the axle.