It looks very much worse than it is. None of the rust patches are that deep. I would be very confident that internally, the tubes are fine. Here are views inside the BB and headtube. Its not even that old...less than 25 years!
I decided to take Bob's advice and flat down the frame and polish it. I used some Jenolite Rust Remover, which is a fairly thick pink paste, that I dabbed on the rust spots and removed after 15 minutes, this was fairly successful on most of the spots, revealing the raw steel beneath.
I then T-cut the frame and polished it. All the components were in good condition so they were cleaned and lubed, both the headset and BB were Campag and cleaned up very well and are now running smoothly in situ. The only snag was the adjuster bolt in the rear mech that had snapped off, leaving the bottom part threaded in the derailleur body. I drilled it out a little to enable me to insert my smallest stud remover and it came out easily.
I put on a new 3T stem to replace the ugly one that was in there, this was actually some sort of suspension stem that I've not seen before. Now I just need to put on the mechs and chain, cable it up, add a new saddle, put on new bar tape and the job's done.
Here's what it looks like so far, with a borrowed Brooks