Paint.

paint.

Knotty pine doesn't age well. It just turns yellower and yellower.

If you clean , prime and paint over the paneling you will still see the grain and knots. The primer would need to be designed to seal bleeding wood or the paint over the knots may soon stain the paint. I would remove the paneling and sheet rock if necessary. If the paneling was solid wood it may be useful to someone else.

Paint as stated above; it will turn out nicely! Have faith.

Transparent stain showing knots.

Paint with knotty pine on the top and paneling on the bottom

Painted a mellow color.

Thanks for all your comments. Don't want to remove the panelling as that would entail fixing all the walls, etc.etc. Am adding pics for further suggestions

So if I do paint, any ideas on a modern colour-I was thinking of a light grey or sandstone? Suggestions?

Gray may be eclectic or modern. If you have traditional interior decor, try to stick with warmer colors, such as your sandstone. I would paint the fireplace surround as well - in a shade two or three colors darker - so it makes it stand out. Let's see what others say.

What color do you plan for your trim? In our dining room we have gray walls with bright white trim and I love it. We used Behr's Gray Heather or Heather Gray, can't remember which.

Doors are white, blinds are white

These walls should paint up very nicely! Make sure you use a good shellac based primer like BIN to seal the knots and you should be fine with the bleed thru problem.

You can paint the pine if you promise not to paint the brick! A creamy warm color will go nicely with the brick and help you to like it better.

What Nancy said! (Thank you Nancy, I needed a good laugh this morning!)

I have a family room that is all knotty pine walls and ceiling. I want to paint it but I feel all the examples I see are white or light tan. I feel this would make the room have a cottage look. I am putting in a stacked stone fireplace in light tan stone. Any suggestions??
Was thinking of keeping the ceiling knotty pine but paint the walls. The what about the trim. It keeps me up at night trying to figure it out???