What a sad situation for you, your daughter and granddaughter. Other posters are correct in saying your daughter, who will share parental responsibility with the child's father, has more chance of contact that you have.
Have you seen an experienced solicitor who specialises in private law? When you say you have 'done mediation', do you mean you have been to mediation with the father?
Would the father agree to mediation with you? It sounds as though the separation was conflicted. The father may feel he's protecting his daughter from further stability. I'm not defending the position and all too often when parents refuse to allow contact with the non custodial parent, they are not acting in the best interests of the child.
Are you in regular letter/card contact? That may help your daughter remain in her little girl's life. Will he send copies of school reports photographs, help her send cards to nana and mummy. This kind of indirect contact can form a bridge of sorts until your daughter gets some help with her ptsd.
Sorry not to have instant suggestions to help make it all ok