I know the feeling of being scared to stop contact so well.
But, when you know it's not right for your DD, I found that the fear goes away and your 'tigress-mother' kicks in. At least, that's what happened to me.
In your exH case, he seems unwilling, rather than unable, to put your DDs safety and welfare first and I get the feeling that deep down, you know that she isn't at risk - not withstanding the fact that she is subject to a lot of point scoring.
It's all got really hostile and your DD is caught in the middle - but a bit of common sense would resolve things fairly quickly.
I don't blame you for being furious that your ex has delegated care of your DD to his DW, who seems determined to fulfil an equal role to your own - but the current legal framework does not seem to adequately provide for these situations - which IMO, fails the DCs.
A few months ago, I sought legal advice because my ex was trying to replace me with his DW in DDs life. It was clear that my only recourse was applying for a residency order - but we have reached a satisfactory compromise after very difficult and honest mediation; I felt I had nothing to lose and surprisingly, it finally seemed to get through to my ex.
It was also very liberating to say to my ex's face that I didn't like him - he had mistaken my civility in front of DD as genuine friendship 