ᐅ Insulating a slanted wall / cavity in front of or behind insulation

Hello,

I am currently renovating our garden shed (wooden structure), which we recently acquired and had to completely gut first.
Now I have a question about insulation, as I have the following fundamental problem:

Unfortunately, the exterior walls are completely uneven—both in the floor plan lines and vertically. For the interior cladding, I need to build a furring strip framework that is straight. However, this will result in gaps between the interior wall cladding and the exterior wall varying from 8 cm to 22 cm (3 inches to 9 inches).

My question: Is it better to install the insulation directly against the exterior wall or directly against the interior wall cladding? In other words, where is it smarter to leave the cavity due to the varying distance? Most walls and ceilings only allow for insulation up to 8 cm (3 inches) thick. This would mean that, with the uneven walls, there could be up to 14 cm (5 ½ inches) of air between the insulation and the interior or exterior wall...
If necessary, here is some additional information:
The exterior walls are constructed from inside to outside as follows: wooden battens, expanded polystyrene (EPS), roofing felt, tongue-and-groove cladding. Inside, I plan to install a vapor retarder over the insulation and then cover the wall with 12 mm (½ inch) plywood panels.

Thank you for your suggestions and recommendations.

But it is still considered a garden shed and not a second residence, right? If you don’t see a risk of moisture in the insulation area, just insulate the entire cavity with mineral insulation (glass or rock wool). It is flexible and helps you avoid cavities (where other issues could occur).

Check whether the leaning wall is not a sign that the shed might collapse soon. Even in the past, tape measures and spirit levels were available, and craftsmen or DIY builders rarely or never built something so crooked. Perhaps a tree fell on it at some point—ask the neighbors.

Thank you in advance for the answers.
The reason the wall is so crooked is that there used to be a raised floor with joists that pushed the exterior wall outward. I have now removed this floor, but unfortunately, I was unable to move the post back into place. However, it doesn’t look like it’s collapsing. And yes, this is not meant to be a second home, but rather something nice and reasonably tidy. If I were to use more than 8cm (3 inches) of insulation everywhere, the loss of interior space would be too great.
The old insulation I removed was dry, so I assume there is no moisture problem there.
I will probably insulate the entire room as you described. I was worried that if air gaps form, condensation might occur—but I don’t really know much about this subject, so that’s why I’m asking here.

Without detailed knowledge of the building, external insulation is generally more efficient. Perhaps consider blown-in insulation, as it is not affected by varying cavity thicknesses. However, I am not sure if it is suitable for 22cm (9 inches).

Thanks, HausiKlasi. It’s just a garden shed, so it doesn’t need high-performance insulation. For us, blown-in insulation would not be cost-effective. External insulation is not possible due to the allotment garden regulations, which state that the external footprint cannot exceed 24m² (258ft²).