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I have an 80's Peugeot steel-framed racer that I want to convert to singlespeed/fixed. It has a standard square-taper BB with a double chainring chainset. I can see the chainrings are removable from the spider and was thinking I could just remove them and replace with a singlespeed ring to save having to buy a whole new crankset.

Will this work or will I have problems with chainline? I have yet to buy a new rear wheel with singlespeed hub so it's quite hard to check if chainline will work. I presume it is possible to bolt the chainring to either side of the spider giving me a choice of two positions. Beyond this I'm not sure how I would adjust chainline if it's out.

Any general help/tips regarding conversion appreciated. The bike has horizontal dropouts (not a track rear fork) so tensioning shouldn't be an issue.

Here's a (not very good) picture: enter image description here

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Yes it will work. Should you want a different sized chainring you'll just need to find one with the same BCD (bolt circle diameter) and you'll need shorter chainring bolts and/or chainring bolt spacers.

In terms of chainline, you have a multitude of options. The easiest one is to buy a cassette style wheel and a single speed conversion kit which consists of a cog and a bunch of spacers. By adjusting how many spacers you use to the inside vs the outside of the cog, you should be able to dial in your chain line with no further adjustments. The cheapest but trickiest and most time consuming option is to re-space your existing rear wheel's axle and re-dish the wheel accordingly, and then slap a single speed freewheel on in place of the multi speed one that's on there now. Finally, if you want a nice clean look and the extra security of a bolt on axle, you can buy a rear wheel with a single speed or flip flop hub and adjust your chain line with a different length bottom bracket- assuming the chain ling isn't good enough as is when you change the wheel.

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Thanks, yeah it's really going to be fixed-gear on a flip-flop hub with a freewheel for when I'm tired/going up/down hills etc. This rules out using a freehub or reusing the current wheel. As the current rear wheel on my bike is a cheapo replacement for the original that gave up the ghost a while back that's no bad thing! I'm going to cycle jumble this weekend so will see what I can pick up there. If not I'll need to get a wheel built by the LBS. –  harryg Sep 5 '13 at 8:34
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Indeed It should work.

The other answers address chainline correction options for the rear end, but I know at least two for the front side:

Usually two big rings in a triple, or the two rings of a double would be fixed by a single set of bolts. That means the chainring bolts are long enough to hold 2 chainrings. When going to hold only one, it may happen that the bolts are too long, so you may need spacers to fill up the gap. These spacers can be used to fine tune the chainline in the front side.

Also, if the bottom bracket is the old cup and bearing style, the cups can be adjusted to provide a few millimeters of adjustment. Shimano sealed BB's can be shifted side to side by adding Bottom Bracket spacers, which should be really cheap.

I will mention a third one, although the OP clearly states that wants a lean budget approach, chainline can also be altered by swapping the bottom bracket cartridge or axle. (Can be done low budget if using secondhand parts).

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