Sand all the paint off the stem and get it wet before putting it back in. Let it rust to the steerer tube for a few months.
J_S said:Heh. You are making me feel old. Most of my bikes have that 'antiquated' setup.
Pull the stem out and grease the threads on the binder bolt that lead into the wedge nut, and grease the spot where the top of bolt enters the stem. Grease the stem, too, so you can get it out in the future. Take a look at the wedge nut. Is it deformed? Check the inside of the steerer tube. If it is no longer round, or if it is cracked, then you have a different problem.
Most importantly, when the stem twists in the steerer, you need to first loosen it, move the stem slightly up or down, and then tighten it again. If you just tighten it, you may not get a firm grip on the inside of the steerer tube. The wedge nut needs to move a little, so it can find a new place to press against the steerer. Check your front brake, and off you go.