Tiling in the Bathroom

Here’s the situation:

I currently have tongue n groove all around the lower half of my bathroom (put in by previous owner) & I wish to tile this half instead. Now I know it is not really ideal or advisable to tile directly tile onto wood tongue n groove; but on closer inspection the wall underneath is in a bad way; presumably why it was put up in the first place.

My plan is to remove the tongue n groove & then use the existing battens to either plaster board or aqua board the walls before then tiling. Does this seem like a sound plan or does anyone have a better idea?

Thanks

You may be just as well throwing on a coat of Bonding plaster. As it is getting tiled over it does not have to be like a glass finish, in fact slightly rough or with a scratch finish will give better adhesion to the tiles.