nina I'm sure all you wish for is the best for your daughter and the children and I accept what you have said. However from a male perspective and one who has been sold the "we are just good friends, there is no romantic involvement at the moment but that is not to say there will not be in future" (that's word for word) story only to find out there was only one bed and they did have sex within hours of leaving me (she told me weeks later) I'm afraid suspicions will be high and your son in law naturally will not want his sons to suffer the emotional turmoil a different male, friend or otherwise, would inflict on them no matter how nice a person he is.
I agree with other posters that another man on the scene so soon will not be good and if your daughter is unhappy that it will restrict her ability to see her friend as much as she would like then there may just be a little more to it than what at first appears. I hope not and would like to think honesty, integrity and morals would prevail but I guess I have had that concept shattered so perhaps am a little too suspicious now. All you can do is be as supportive as you can or want to be and offer the benefit of your wisdom. Others have summed it up admirably. I hope a satisfactory solution is reached for the sake of the children but I fear the worst is yet to come. Lets hope not. Good luck.