Switching from PhD to MRes, taking a Leave of Absence, or dropping out of PhD due to mental health
There's a very clear difference between the three options that you've listed- depending on your long-term goals, the right option should be easy to determine.  

If you still want to ultimately complete the Ph.D. program but know that because of your health you simply can't be successful as a student now, then you should try to take a leave of absence for however long it takes you to recover your health. It's a bad idea to try to work through your current problems- you might do so poorly in your studies that you'll be asked to leave the program.   

If you've changed your goal and decided that you'd like towards a master's degree, and if you think that you can be successful in the master's program without taking a leave of absence, then you should ask to switch to the master's program.  If you don't think you can be successful as a master's student right now, then you might ask for a leave of absence first.  

If you've come to the conclusion that completing a graduate degree isn't one of your long-term goals, then simply withdrawing from your graduate program is probably the appropriate path.  

Of course you may not be sure what your long-term goals are.  Figuring this out while dealing with a serious mental health issue is very difficult.  Requesting a leave of absence might provide you with the time you need to figure that out.  

You should certainly find out what the consequences of a leave of absence would be for your scholarship.  You'll need to discuss that with the scholarship sponsor.