It’s most likely the moisture that’s softened the paint. Let it dry and go brittle, scrape of all the loose, attacking it from different angles. Don’t try and rub the edges down as you would on car paint, it’ll make it peel, just a light rub all over and then, if you’re not lining, a coat of thin ish emulsion. Fill all the uneven bits with a wide joint filling blade and easyfil. Rub, paint and wait for it to crozzle* because you haven’t lined 🙂
*you might get lucky depending on how much paste is left on the wall.
HTH