Rust above rear wheel arches

[brianf]

My 1994 Mk3 is in remarkably good condition and has only done 116,000kms (72,500m). However, it stands outside and I have just noticed that it has developed some blistering above the wheel arches on both sides in places where mud has collected. Without removing the plastic liners, I don't know how extensive the rust really is but the inward folded lips are affected.
My question is - are repairs practical in that area and is the cost likely to be more than the vehicle is worth? Before I approach a bodywork specialist, does anyone have any suggestions about how to keep the cost down?

[zollaf]

first off, remove the liners and give it all a good clean and remove any flaking paint .if there are no holes, apply some waxoil to the inside of the arch to prevent further rust. then paint the outside with hammerite, or get it painted properly depending on how fussy you are.