Gear Engineering by H.E.Merritt gives the following advice:
"A general-purpose rule, for the avoidance of tip interference at standard centres, is to make the difference between the tooth numbers not less than
(T-t)min =10 + t/5
By strict geometry, the minimum tooth number difference at which tip interference begins is approximately 8, for 20 degree full depth proportions, at standard centres. But this is a marginal condition."
Using this advice I designed a small reduction gear box for a governor drive in 10DP with a 21 tooth pinion and 36 tooth internal gear. Addendum modification was +0.25 for the pinion and -0.25 for the internal gear. This was about as close as I thought it prudent to go. The gear boxes have been in service on US Coast Guard vessels for over 30 years now, and I have not heard of any problems. So I would say it's a fairly good rule to follow.
As far as actually cutting the gear, personally I would follow JasonB's advice and use the lathe to plane the profile.
Neil