Are you planning on keeping it as a working fireplace, or is it that you don't like the Art Nouveau style mantle? It's hard to judge the proportions, you need to take the pic as far back as possible. The mantle is exactly right for the age of the house and I personally love the soot tiles.

I'd be tempted to try and remove a section of the over mantle and 'box' in a mirrored section. Then replace the bottom grate with an Art Nouveau style cast iron fireplace.

Difficult to show what I mean as the picture is wonky. Hopefully you'll get the idea,.

Thanks yes we need a working fireplace but I think this is too tall and thin

It doesn't look that thin, maybe you could take a picture from the doorway pointing towards the fireplace to get a better perspective.

It is much narrower than the photo would suggest, it seemed to get distorted when I uploaded it. This might give a better view

Ah yes, that's better. It does have room to be a bit grander. I'd remove the mantle, then see what you think about the width of the opening. I'd highly recommend not trying to amend that. Work with the width and decide on open fire versus log burner maybe? You can have either.

I would probably pick the open fire & have a Victorian cast Iron style fireplace.

You can then have cupboards built in possibly either side which match and help balance the room. Give it a wider hearth and a nice large mirror above it.

Thanks, your first picture was similar to my initial thoughts on this