PetahW;

That is a nice rifle as it is.  I understand the urge to change things (and dare I say go for it?), and your idea to recycle a buggered stock is laudable.  Pictures, please.  What will you do with the current stock set?  I am interested in it.

Ed

Nice stumble, that. A 12 takedown like that in my path would get my wallet out. I've thought about your "Stage Two" exactly. Maybe shorter, but right about there. A really nice original would be hard to chop up though. Quite a nice dilema to be in. I'd sure go shooting and think about it a lot.

JMHO but . . . . .  if that was a run of the mill 12 I''d say do whatever feels right.  But since it is what it is I'd sure refrain from any non-reversable alterations.  In the long run it'll be more valuable both historically and $$-wise as is. altered it'd just be another cut-down martini.  I'd make a new stock and save the old one and keep it with the rifle to shoot.  I'm not interested in guns I won't shoot for fear of hurting condition or value---not that I can afford THAT kind of gun . 
   I'm not sure about the "mount" on the mid-barrel though.   A lot might depend on exactly what it is and how it was attached.
Also too there were a lot of small bore Martini target rifles made, and a lot imported to the US over the past decade or so. I know a few guys who are collectors but there are not real big bucks in them--yet. Though over the past 7 or 8 years prices for "nice" ones seem to me to have about doubled.   Rifles that have been expertly and artistically altered by well-known gunsmiths may had added value as opposed to DIY or local 'smith work.

All said,   It your baby though.

Finding a nice model 12 such as this is getting hard to do and is worth far more as is, or lightly cleaned. If it were me and I really wanted a rifle built up on this action I would try my best to purchase a nice action/barreled action with a nice bore and build one up.
Mike