Dolly I may not know the full picture but from what you've said so far, it seems to me that your daughter has suggested twice that you should get in touch with social services; once when she couldn't cope and once as a 'threat' when she thought you were interfering. Either way, she isn't saying don't do it.
I know she isn't giving the same message consistently to you but that's probably due to the depression. Perhaps she can't think rationally at the moment or really does want help and is just scared of the consequences if anyone else gets involved.
I agree with what others have written that whoever gets involved, it doesn't have to be a negative experience. It's in no-one's best interests to take the children away from her and some appropriate support at the right time can keep things on track and mean exactly the opposite.
Ask yourself if you're over-reacting to the incident at school or if there really is genuine cause for concern due to continuing or worstening problems. If it's giving you sleepless nights and causing you to be so upset, chances are it's the latter. But I sometimes think all the worry about what to do is worse than actually making the decision to do something and it turning out badly.
Unfortunately for us all, life doesn't come with a rule book of the right and wrong things to do when things trouble us (I wish it did, but knowing me I probabaly wouldn't read it!). So all you can do is go with your instincts. At least you will have the comfort of knowing that whatever you did was out of love and care for your daughter and her children.
Remember to look after yourself too - perhaps a visit to your doctor to see if he can help or support you in any way?