Been there, done that got the tee-shirt 


Very long backstory that one day I'll set down, but we had an interfering grandparent (MrsLHs mother) who subtly, but disastrously undermined our parenting and almost led to a complete family breakdown. It poisoned relationships with our DS so much that he had a breakdown, and had to leave home at 17.
You need to completely exclude this woman from your sons life. And if that means yours, then so be it.
Hopefully at 11 you can pull it back.
You don't mention if you have a DP or not. Part of the evil witches modus operandi was to badmouth me to DS whenever he stayed over, or had a holiday with. It started subtly, but led to DS having no respect for me - and by extension MrsLH (because she was with a loser like me).
You also haven't mentioned your backstory with your DM. Now MrsLH and I are in a quiet place (NC for a year now) MrsLH has started to realise there are signs from her childhood that her mother was a very controlling, conniving person. Every so often she recalls incidents where she was bullied or pressurised.
I hope everything works out for you.
I would strongly advise you to call the police (101) and ask to file a report for the incident. This is essential, as it will give you a defined line in the sand which can't be "re-imagined". Otherwise I can promise you your DM will try to persuade the world it didn't happen.