if you can afford a mk2 1.8 8v why not get one of those as your next car?
considerably faster than a 1.4 mk3 and then you could turn that into your project and put a 20VT into that and 1) it will be cheaper an easier 2) a GTI is a MUCH better spec'd car as standard, to be honest even with a 20vt engine your mk3 is still poverty spec.
Id suggest you keep your 1.4 as a 1.4 find a mk2 or 3 gti and use that for a conversion but keep your mk3 until you are done.