Damp basement fix (long)


Hi folks,
This isn't DIY as such (although some DIY will be required once work starts), but your advise and suggestions for options in how best to approach fixing this problem would be appreciated.
My house is a 100 year old mid-terrace with no foundation (just a few courses of bricks on to the ground). I assume that the basement *was* a wash-room - it has a sealed up fireplace and *had* an open drain (effectively the room was open to the elements). It is about 2/3 underground and about 6ft 6" high.
About a year ago it was extensively modernised with the intention of creating extra living space. The coal shoot space was converted in to a bathroom (shower, toilet+macerator, sink), a space was dug out beyond the area of the existing basement to create a kitchen, the open drain was walled up and sealed and the entire space was wired for electrics, plumbing, central heating etc, carpeted, plasterboarded, smoke & heat-alarmed etc.
Unfortunately, the work was carried out without proper consideration for damp (it wasn't tanked) and the plaster in the main room and corridor areas, plus the woodwork in the kitchen are showing indications of the presence of damp (mould appearing from ground to about 50 cms up). And there's a persistent dank smell. The mould is popping up in areas where the plasterboard walls are in contact with the ground, around the window, on side walls, by the stairs leading to the ground floor - effectively the moisture seems to be being sucked up from the ground. Further, the builder chose to paint the original brick walls before fitting the plasterboard with some sort of tar and then mounted the plasterboard on to horizontally mounted batons, off the wall.
The kitchen and bathroom walls were covered with plastic cladding which therefore aren't showing signs of damp, but the MDF carcasses of the units fitted in the kitchen area are showing signs of mould, again presumably being sucked up from the ground in which they're in contact. The bathroom having a tiled floor and usual bathroom-type, non porous fittings, shows no indication of damp.
I have been advised that the fix to all this is to strip walls and floors back to bare brick/concrete, have the tar sandblasted off and refinish these surfaces. A couple of options have been suggested by different people:
1) Tank floor and walls up to a height of about 1 metre throughout and fit a water-well-type-thing at the lowest point, connected to a pump (this in case of emergency flooding). Then refinish walls and floors.
2) Have DPC installed around lowest possible point of wall around rooms and tank floor and very bottom of wall up to level of DPC. Walls could be left as bear brick or resurfaced, at my choice.
Either way I've been told that the wall surfaces have to be refinished up to the ceiling, as these must be ripped out so that the tar can be removed (this is preventing moisture trapped within the bricks from escaping, I'm told and the horizontal batons onto which the plasterboard is mounted are prevent air from flowing over the wall, between the bricks and the plasterboard).
I would like to leave the bathroom space be and have been told that it *could* be OK, but likely would simply need work doing after a few years anyway (tiles might start to pop up off the floor and suchlike) - not sure whether to take a chance on this or not.
It all seems such a waste given the otherwise finished state of the space, but I know that it cannot be used for its intended purpose until the problem is put right. I just want to keep the cost to the minimum necessary and avoid ripping out as much as possible.
I know you cannot see the area for yourselves, but from what you've heard and with whatever experience and knowledge you guys have, what would your advice and recommendations be?
Many thanks.
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