I’m going to be blunt because this is one of those situations where the numbers speak louder than any justification.
You didn’t just give different gifts. You sent a very clear message about who you see as “family” and who you don’t. And its a message your brother has received clear and loud, whether the rest of the poster on here feel the same way or not.
Your brother has spent eight years doing the hard work of making his stepdaughter (and stepson) feel fully included. That’s not easy, blended families take effort, consistency, and care. And then you come along and give £1000 to each biological niece and £50 to the stepniece. That’s not a small difference. It’s a statement.
You can absolutely choose who you gift and how much. No one is saying you’re legally obliged to do anything. But you don’t get to act surprised when people react to the message you’ve sent. Because the message is “These two girls are my real nieces.” “This one isn’t.”
Ask yourself a question, if time travel was possible and you could have all 4 kids (2 bio nieces, step niece and step nephew) together in front of you at ages 17, would you feel comfortable accepting the impact of giving £1000 to the two bio nieces and not the step niece/nephew in the actual moment. No discomfort about the discrepancy and conclusion they would come to?
And yes, your step niece will feel, that you have confirmed she is not as valued as your bio nieces, if not now, later. She’s 17. She’s not daft. She probably knows what the others got and yes probably from your brother. You’ve drawn a line she can’t unsee. You can absolutely feel that she is not as connected, but you shouldn't show it, its like not showing favourites with your kids1
As for the “her bio dad can pay” argument - that cuts both ways. The bio nieces have a mother and maternal family too. You decided they couldn't afford it and on what have you based this decision for your step nieces family and why not communicate that prior to gift giving? You didn’t leave their driving lessons to their Mothers family. You stepped in because you see those girls as yours. You chose not to step in for the stepniece because you don’t. That’s your right. But own it.
Just don’t pretend this was a neutral act or that the hurt feelings are unreasonable. You’ve made a distinction, and the people involved, especially the child, will feel it.
If you want harmony in the family, you need to understand the impact of your choices, not just defend the technicalities.