He sounds like a skilled manipulator, so it's not surprising you find it difficult to stand up to him. Add to that the obvious history plus the fact he is 'ill' (my dh is chronically ill but not a chronic shyster as your ex would appear to be) and it makes for a very emotional mix.
If you think you must take the stuff, do so, but be clear this does not cancel the debt and you will want the balance when he can pay for it.
I'd also say: don't get involved in a row about it tomorrow. That's what he wants, because it gives him the opportunity to make it emotional and thus manipulate you again. I'd try and keep it simply to business, accept the stuff, say I'll let you know what I get for it and so how much you still owe and leave it at that. If he wants to discuss it further I'd say you need to take advice first and you'll be in touch.
You can't possibly discuss something like this whilst dd is around, it's not fair to anyone. Can you be 'on your way out' when he comes to pick her up, such that there isn't time for a protracted debate, just a handover and 'see you at [x] time'?
I think whatever you do, don't respond to him again this evening. He's bound to send some godawful text in reply. Turn off the phone?