I was reading this the other night...
http://www.surplusrifle.com/shooting/no4223/index.asp
7.62x39 Conversion
At the same time as the .223 Remington conversions, another caliber conversion also appeared. 7.62x39mm. I experimented with a 7.62x39mm conversion before I started on a .223 conversion, but later sold the rifle and ammunition.
The 7.62x39 conversion is a little cheaper, because the original .303 barrel is recycled. The bore diameter is perfect for surplus Com-Block ammo. There are two methods of chambering. The first is to cut off the original threads and then machine new threads onto the barrel. The headspacing is more than good enough. If you look at the shoulder/neck areas of a 7.62x39mm and a .303 British, they are almost identical. The second chambering method is to cut more than the threads, like 5mm (or about .2") more and then use the appropriate reamer to cut a new chamber from the metal. The collar on the bolt head is similar to the .223 Remington, but narrower because of the wider base. For magazines there are two possibilities. The first is to modify an AK-type magazine to fit the Lee-Enfield's magazine well. Some gunsmiths managed to alter the receiver to take an unaltered magazine. The magazines were typically shortened to a more convenient length (typically 10, 12, 15, or 20 rounds). The second is an insert, again similar to the new design .223 Remington conversion magazine, but altered to fit the dimensions of the 7.62x39mm.
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.223 Remington and 7.62x39mm are well within the limits of the No4 receiver and don't have to be proof tested.
http://www.surplusrifle.com/shooting/no4223/index.asp