External insulation is a better way to go- if internal then take care not to create air paths into the house from outside. Also how will you deal with the thermal bridging at internal walls? between the floors etc?

As Tony said already, internal insulation is a specialist's job, leading to lower energetic returns when compared to external insulation.
To avoid pitfalls (condensation,thermal bridging)get the job calculated by an engineer/architect who should calculate the DYNAMIC DEWPOINT.
For example by using the " wufi "-calculation program.
Check the www for "wufi" to find out more.

Well, thank you both, this is yet more information about the bigger picture for the amateur to digest!
 
Our original enquiries suggested that exterior insulation seemed prohibitive costwise; however I am understanding more of the reasons why interior can be full of shortcomings and risks, especially after reading threads on cavity wall disasters which, originaly, I had not seen as relevant to our solid walls.
 
Although I am not up to the wufi technicalities, reading the wufi Example 4 on solid walls is very informative. Presumably the quality of the interior insulation, polystyrene or whatever, makes no difference to these findings?
 
We will be in conversation with our local builder, this helps us to better understand the issues.
Thanks again.

@ locarbon:
".... Presumably the quality of the interior insulation, polystyrene or whatever, makes no difference to these findings? "
 
Well, for the condensation risk it can make a huge difference.
Depending on the Sd value (the breathability) of the existing wall and it's composure internal insulation can be done without risking the structure to dampness and mould growth.
 
But this needs careful planning(the dynamic dew point calculation !) as well as carefull detailing.
A major point is to remove ALL organic material prone to rot. For example timber cills and lintels, timber plugs as used in the old times, wall papers and wall paper glue as well as paints.
Technicall problems will be encountered when getting to loadbearing timber, floor and ceiling beams stucked into the existing walls and resting there....
 
One material which might be suitable-after looking at the issue carefully- is a foamed mineral board, trading as "calcitherm" (or other,different brands names). The Sd value of the material should be very low to allow condensated water to get out.Preferable before condensation happens in the first place.
Again these boards are not allowed to be painted with encapsuling paints,not to be covered with encapsuling plasters or wall papers.
What could become a problem with changing owners.
 
The "breathability" must be there at all times, the Sd and (greek-)my values carefully calculated and combined and the materials choosen correctly.
 
A signed and guaranteed wufi calculation done by an architecture/engineering office isn't that expensive. Check the wufi page for certified and registered users, what I heard about there are now more then 200 of them working in the UK, getting more every month. So there is already some competition for this service, shop around and see what is on offer.
 
There are other dynamic moisture calculation programs as well, in the USA they use one which seems to work as well.
 
You did well to investigate the issue, other home owners waste a lot of money to create a sick building. Then the doctors have to investigate.