This is the best answer.
Honesty is best, always, but there is a time and place for telling the truth.
Gently put him off this Christmas, but no need to say anything else just yet.
How often would you normally expect to see him? If it is only a couple of times a year, carry on as normal and hold fire for now.
In about a year, when the bereavement is not so close in time and raw, discuss the situation with your DD, and get her opinion of him - it will be affected by how much time they actually spent together. Ask her not to tell him as you will do that. Warn her he may want a blood test from her.
If you would normally see him more frequently, you may have to shorten this timetable.
Very soon after speaking to DD, promptly arrange to meet him and tell him the truth about his parentage, face to face. He needs to know.
But don't say anything at all in that conversation about his behaviour or about no longer seeing him.
Give it a further several months, keeping a bit of distance and minimal visits if you must. After that time, you could talk to him about his behaviour, if you think that will help or if you want to. If you still really don't like him, a gradual fade out would be best.
Meanwhile, as another OP said, check with a solicitor about your will and whether your DD inheritance is safe, or whether he could have any claim.