If the walls are failing due to the lime plaster drying out my understanding of list 2 is you can strip and replace with modern gyprock and insulation..the catch is the new insulation regs, some councils are different to others and have some fascinating ways of interpreting the rules, just phone them and they can advise.
To the OP, if you are sleeping downstairs it’s an opportunity to strip the walls and do as above, messy but not exactly complicated, the only tool you need is a claw hammer…and an old hoover, but does mean shelling out on new plasterboard/insulation/skim.
Reason being if the lime plaster is shot, or been patched with B+Q 2 pack or something it will continue to crumble, the alternative of patching on lathe is not hard for a plasterer but getting three layers of wallpaper off and still having a wall is usually what makes the decision, by the time you have the old paper off you may have more to replaster than just replace.