Can I ask what this means...
"Yes our daughter has been v clued in to how precious and self serving her sister was. She is nothing like this. A model little girl. Respectful. Busy n her life. Doing well in all areas. Helps around the house. Shows appreciation etc. She has seen me do what I did and I think was quite uncomfortable with it all."
I think you are missing a massive amount of awareness about your step daughter and why she might be how she is.
Of course your dd is a great kid and very helpful etc if she has had two caring parents in residence etc so far.
Your step daughter did not have that, I've no idea what the life of your step daughter was like before 12 but from what you say.. "DP left family home 12 years ago when she was 12. Her older brother was 16. .... His dd went to boarding school and returned at weekends to alcoholic mother. She wanted nothing to do with her dad, or me or dd until dd was about 5. Ex still lives n family home
drinking. I still felt though this was not reason for self entitlement etc at 24."
So she may or may not have had an alcoholic mum from quite a young age, her father left her at 12 which must have been horrible for her, even if your partner tried to stay in contact, maybe she felt a bit abandoned. Maybe she loved boarding school, who knows, but at the very least she was coming home every weekend and holiday to an alcoholic mother, I expect that could screw someone up pretty effectively.
What changed for your step daughter when your dd 5, why did she suddenly want contact? It may or may not have been fully her choice not to see her dad before that, maybe her birth mum exerted some influence over her there.
I'm sorry but you don;t sound very aware of what your step daughter may have been through and how this may have affected her and I think your first move could be to get clued up on what growing up with an alcoholic mother could do to a young girl.
I am not saying you need to do her laundry to make up for it but personally I think, like it or not, you are her step mum as she is your partners daughter and she is your daughters half sister, so I would work on the relationships and finding a smooth way forward, and your partner needs to be on board in helping with this, IMHO.
Good luck, it won't be easy, but it may well be worth it.