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Water affected ceiling

My ceiling in my dining room has been affected by a leaking pipe in the roof. I am unsure as to whether I should put in a false ceiling slightly lower than what is already there or if it can be gibbed and plastered. The house is about 90 years old with lathe and plaster walls and the ceiling has paper on it. The water leak has caused the paper on the ceiling to peel off in spots and it has the look of dirty water stains. It will also need to be repainted.