Damp cupboard - plastering Q?

Flamingo_2

Hi
When we moved into our house the previous owner left us a note stating that the damp smell in the hall cupboards was due to him leaving damp tools in there and it would soon dry out......
Anyway, it was a lie!!! In reality the shower was actually leaking badly through the bathroom wall and into the cupboard - who knows how long it had benn going on for before we discovered it!
We've bought a dehumidifier (as the leak also went into the spare room) and it seems to be doing a good job, however the cupboard still smells of damp (not as bad as it did)
Finally my question.... in order to make the cupboard fit for storage purpose again should we chip off the existing plaster then re-plaster and paint, or would it be ok just to paint over the existing plaster?
Which option would you go for? Is there any particular type of paint you wuold suggest for this type of job?
Many thanks in advance