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By the time I chase the loose stuff, if it gets anywhere close to half the wall, I would go that way too. Bought a bag of lime plaster in case there is an amount I can do myself. The external wall is lime plaster on brick and there's probably only a couple of square ft of that that isn't solid (to my knowledge).
You can cut it out and leave the good plaster. But you’ll need to replaster in lime to get a good bond.
Or you can take the entire wall off and use some gypsum to redo it.
I’d do the latter.