Haven't read the full thread yet, but I am a bit shocked that people consider fish and chips not junk food. Where I am it is considered greasy takeaway, ie artery clogging and not a good choice. Especially the chips. If it was grilled or crumbed fish, then, yeah, fish is healthy. But if you add in batter and deap-frying chips, all that oil and fat. Not my idea of 'healthy' food at all, and I do admit I love some fish and chips, but I do recognise that it is what it is, greasy unhealthy takeaway.
Regardless, you are his mother and have legal rights, she has his grandmother, has none (or at least very little). Being undermined is a very frustrating feeling, and you and your husband really need to have a serious talk.
There was another point; he is 12. Many kids that age are 'latch key kids' ie home by themselves after school for like, 3 hours (which is not much), do their homework and often at least in my experience, help by starting to get the dinner ready for parent/s to finish when they come home. Many 12 year olds are babysitting after school, then get home, greet their parents etc. I don't see why he needs to have child care at his age, unless there are health/developmental problems. So perhaps its time to cut her childcare right down/out, or at least start a gradual phase out. He is 12, and I presume in high school or about to be? No reason he needs childcare at this age.