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Building below grade is a very different beast that building above grade, and the most common mistake builders make is building basements walls the same way they build above grade walls, without realizing that they can’t dry to the outside.
So putting organic materials like wood against a wet concrete wall, (yes, your concrete wall is probably wet even if you think its dry) followed by batt insulation and a sheet of plastic should surprise no one when it starts sprouting mushrooms. So we're happy to hear you're not going down that road. Here are two pages that will set you off on the right path to a healthier more durable basement:
I have a few questions that will help us pin down the best way forward for you - How old is the home? Is there an exterior membrane on the basement wall? And have you ever had any flooding issues, either from bulk water, or just high water tables?