Ok thanks a lot for the advice. I spoke with few bike shops and they all said to concentrate on centering the wheel, not on the position of the axle on the dropouts, one guy said it's fine to have it all the way back in the drive-side dropout and half way back on the non drive-side.

I did one final check, used the string (going through the exact position of the drop-outs and tied at the front of the bike at the head tube), I made a few slight adjustments - this time using a plank of wood (Sheldon's method) and got the string to about 35-36mm either side of the seat-post. I then used my homemade tools to align the drop-outs, got them to be parallel to one another and aligned (i think) to the frame. The spacing is about 130-132 and the new wheel went on ok. I then made sure that the wheel was central in relation to the brake hole and seat-tube and then tightened the skewer quite tight. It all seems ok, the wheel spins nicely and is quite central and looking at where the dropouts touch the wheel axles it seems quite flush. Only thing is as I mentioned the axles don't sit on the exact same position of the dropouts but as I've been told it's OK I don't think there's much to worry on. I tried the wheel on another steel frame I had which was 126mm (just stretched it for the wheel to fit) and had it all the way back in the dropouts and noticed it was off center too so I'm guessing it's more common than I thought on steel frames and reason why the dropouts are long and horizontal to allow for mini adjustments.