I drilled my 41 1/2" .62 cal. barrel in my lathe with a twist drill, but I wouldn't try it with a bore as small as .40 cal. I used a piece of 1 7/16" 1144 Stressproof and drilled it with a 19/32" drill. The drill is a straight shank twist drill with oil holes to the tip and a IIRC 1/2-13" threaded hole in the shank for oil the connection. I drilled as deeply as I could with the drill, then screwed on a 12" shank and drilled as deeply as I could with that. I then replaced the shank with one long enough to drill thru. I used lots of Mobilmet Gamma cutting oil and cleared the chips about every 1/2" or less of drilling. The wall on the exit hole was only about .025" thicker on the thickest side compared to the thin side. I then reamed the bore with an armoury square reamer from the drilled hole approximately at .605 to .620 finished bore. The first hole I drilled with this same drill and setup was in a piece of 1 1/2" 4150 Q&T, and it drilled as straight as the 1144, but the material wasn't any good. So, I bought a piece of 1144. I have a very good lathe, I doubt if this would be possible on one that has considerable wear. Like I said, I probably wouldn't try this on a bore as small as .40, and I wouldn't expect to get these results every time with a twist drill, but it can be done. They did invent gun drills for a reason. Charly's best option would probably be as Okawbow said, 1026 seamless tube. It reams very nicely with a square reamer, and as Mark said the flats can be filed. The square reamer can be made by hand and also turned by hand to produce a very smooth bore. A .375 or 3/8" bore tube would ream to .400 without any problems.
Mark Poley