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I've never rendered anything in my life.
Could you offset the retaining wall by 20cm and then fix old wooden boards? They'll weather and eventually things will grow on them. You could even drill holes prepact with soil and seeds.
However, my 2p is to sacrifice 4-5' of garden, put up a fence and do it once all the other works have died down and you have spare budget.
Question: what is the actual problem you are trying to solve?
How to stop your daughter falling in the river in a visually non-offensive manner, right?
This isn't a 3m² garden in Islington you need to eek every bit of space possible out of.
Top the wall and skin it with a thin layer of cement?