Quotes within quotes - quotation marks

Hi there,

I have a question that I simply can't find a definitive answer to.

I want to quote someone who is quoting someone or using quotation marks to set off a phrase. For example:

He said that fresh red tomatoes taste better than "dodgy" red tomatoes.

if I want to quote from the above, can i just do this?

It was said that 'fresh red tomatoes taste better than "dodgy" red tomatoes'.

That's English-style punctuation, correct?

Is this the correct North American-style punctuation? Is it okay to change the type of quotation marks used in the original block of text?

It was said that "fresh red tomatoes taste better than 'dodgy' red tomatoes."

Thanks very much in advance.