How to remove flaking ceiling paint?

We removed wallpaper from ceiling to find the surface in relatively good condition but the original paint peeling in parts. We thought we could get away with just smoothing down the edges of the flaky bits with sandpaper but when we started painting (matt emulsion), the old paint started coming off on the roller and bubbling up.

We've tried a heat gun on it but it doesn't budge. Also tried spraying water on it with no joy. Don't fancy sanding the whole thing down to the plaster and paint stripper seems very expensive for an area this large (about 15m^2).

Any other suggestions? Do we have to get it off or could we seal it in?[/img]

When it flakes off it is back to the bare plaster ?
If so then it sounds as if the plaster wasn't given a mist coat which seals and helps further coats bind.
Try scraping back all the loose stuff then get some zinsser peel stop

http://www.trade1st.co.uk/peel-stop-binding-primer-1lt

Some good paint shops sell it but many don't - the B and Q type places don't. Follow the instructions, then fill to give a decent surface then paint - I always dilute my first coat with quite a lot of water and this won't do any harm though you may need an extra coat.
Hope this works and good luck !
Let us know how you get on..

Just seen that you are in London - if anywhere near W4 then there is a Leyland paint shop on the Chiswick High Road that stocks the stuff but you ought to be able to find many others that do too..

Better call the contractor and have him fixed what was wrong with the paint.