Thanks for the comment Gus!
You are absolutely correct, the building has almost certainly settled a bit. I don't believe ONLY the center went down in the last 50 years, the external walls must have settled even a fraction over the last 50 years.
If I went with idea A (Cut pockets under joists into external wall(s) cavity leaf so joists drop down.) I can't see how any load paths would change too much. This is on the presumption of all the partition stud walls upstairs not actually bearing anything and only this centre block ground-to-roof bearing wall.
Now idea B is where load paths definitely shift. This central bearing masonry wall will literally be lifted roughly 60-70mm at worst. There is a beam directly on the end of this wall in the roof so an element of the roof would raise.
A further element complicating all of this is two presumptions; A) That the house was ever 100% level. Were all walls always totally level? Were joists level? and B) determining where everything is right now. If the back external cavity wall is down 20mm itself as an example, then this has to somehow be factored into idea B if any lifting was to be attempted.
Say I could somehow calculate this, even attempting idea B would be tough.
Disconnecting the top half of the wall from the bottom would be the easy bit, how would one even lift? One dea would be to just put a beam adjacent to the wall under the joists and lift. This though is relying on the 2" of 7x2" on 12" centres literally lifting an 8ft wall above, not to mention the portion of the roof, the joists etc. 10m width/304mm centres is 32/33 joists for the length of the house. That is roughly 1700mm of joist end coverage width "touching" the wall. So jacking the joists would mean lifting directly 17% and hoping it will take it all. Thats not taking into account the strength of the wood, how deep its actually pocketed into the wall etc.
Another option would be to support the cut wall above (With a lot of stongboys!) and every x m pocket in a bottle jack into the lower wall to directly lift above.