If you're not working I assume you are on IS? On IS you can only keep £10 of whatever maintenance he pays (soon to be £20). So anything he pays over this just goes to the government and your children loose out on it because you don't have it and neither does your ex. Wouldn't you rather he had the money so they can get the possible benefit of it rather than it going to the government?
And if he is to be an active and equal parent in their lives (which it sounds like he is trying to be) he will need a 3 bed place in order to give them an equal home too. I know you're angry and upset, but it's kinda hard to say on the one hard you don't want him to be able to afford to have a place suitable to have them and on the other hand that he never does have them. If you make it impossible for him them he won't be able to. Seems like a self perpetuating situation to me...
Seperation can make people re-evaluate their lives. It's not uncommon for the parent who spend more time working and providing to now want to spend more time with the children, especially if that time is no longer as a 'couple' when one or both parents didn't enjoy spending time together but now the other parent isn't around they are happy to spend more time with the children. I'm just saying try not to be too quick in judging his motives here. Are your motives for not wanting him to have them for the length of time suggested related to money or what is best for the children? It's a very thin line at times. Try and work out what it is you are really worried about here and find solutions.
If money is an issue then ask him if he is prepared to meet you half way with this and only claim for 2 overnights a week regardless of the actual number. If it means you can move on from the financial issues and concentrate on the time issues and what he wants is time with teh children then he may be willing to compromise on that. Also bear in mind that the CSA only take into account the average number of overnights per week and round down to a whole number. So if he had them an average of 2.9 overnights a week he's still only get a reduction of 2 overnights a week. Look at the figures, will the sunday overnight make a big difference to the overall average?
He probably feels much the same as you do about squeezing money from him/you. Try and put the money issue aside or find a compromise. Contact is not meant to be based on financial reasons, but what is best for the children. The minute you start thinking you'll be worse off letting him spend more time with the children and therefore can't allow it is when you stop putting the welfare of your children and their rights to a meaningful relationship with their father above your own financial concerns. That is what others meant when they said contact is not linked financially, because it's not meant to be, although in reality that is why some RP makeit harder for a NRP to see their child (not all just some). It is the the way the CSA calculate it and makes it very difficult to seperate the two, even though they are meant to be totally seperate.
Even if he had them exactly half the time you'd still get half of the maintenance calculation, rather than being able to say we have them equally and therefore have equal costs and noone should be paying anyone anything. It's a crazy system imo.
Give the monday mornings a trial run. Go out of the house and leave him to deal with getting them up and out to school. And if it's too early then try staying at a friends overnight so you are simply not there and he has to get on with it. It will be hard at first because the children are used to you doing it and if you're in the house and they know you are they will call for you no doubt. Once they know you are not there and it's dad getting them ready for school they will get used to it. If you're in the background it will be harder for them to adjust and harder for you all to handle i would imagine.
Keep strong. Try and work out the issues through the mediation and see what compromises you can reach. If it's about money that will come out very quickly, but if it's about time then find soultions to money issues to allow the time to happen. It's important for your children to have two equal parents rather than a part time dad who only does fun things. Lots of dad's walk away for whatever reason, but your ex is saying he wants more time. Don't knock him back, time is worth more than money any day imo.
Best of Luck
Gilly