Speldnan... Apologies! I should have read your second post more carefully. No matter what happens, you have every right to support your son. I also realize that your DIL bears much of the blame for the situation in which she now finds herself. I would add that based on what you just told me, there isn't even enough of a marriage left to salvage.
Perhaps a solution would be for DIL to choose another city in NZ where she can live and work and start afresh. They could both enjoy shared custody. The trade off would be that either she, your DS or the girls would have to spend time back and forth. They could attend school on one city and alternate vacations and holidays in the other, or some similar arrangement depending on distance.
In the end, it wasn't the children who created this mess and so it's now up to the adults to find a workable solution for the girls'sake. This is not going to be an easy fix unless both parties are willing to compromise and make sacrifices. I'm so sorry you find yourself in the middle of this.....I would be heartbroken!
Best, Willa