You are absolutely right shaggy there is an obsession on here with lime plaster and most of those who praise and encourage its use dont know a fiddlers fart about it. Tom included.
There would be absolutey no merits whatsoever in using lime mortars in a cellar, and if you think so Tom then just what type of lime Hydraulic,lime putties, pozzolanically enhanced, hydrated???????
I have seen many simple requests here answered with the advice to use lime plasters on even a block built shed, (which led to disastarous results)
which is absolute nonsense.
In answer to the original request for advice, for a completely watertight application then there are very good and often expensive products (Sika) that work in conjunction with renders to tank a basement, or a process of tanking using simply sand and cement and waterproofers in varying batched mixes that will work guaranteed. However and most importantly THE WORST THING OF ALL is to batten out a cellar using mechanical fixings into the walls as this creates a whole series of weak points where damp WILL penetrate using theese fixings as the conductor.water is a thin man and will find its way through at the weakest points , if there are none then you will have a watertight conversion, ventillation is an issue that would need to be addressed on the jobs individual concerns, but is a minor issue on the whole.
If you know nothing of the fundementals of lime and have no experience in the use of and their varying attributes and also disadvantages then do not offer advice on their useage as this could and HAS led to some people with massive and expensive problems to remedy