I'm sorry you are going through this. It does sound very hard.
Please do not worry about your son's nursery, he is young and will adjust; of course nursery would naturally end for him in a year or so anyway.
Your dp seems to have some real issues which he is not addressing. The critical attitude would be awful for me and so would the debts etc.
I would not worry how to tell people, if it is definite just say you have split up. If you ever get back together again you can just say that. If you want to hedge your bets you could say you were having some time apart.
I agree you should not tell your step son until after his birthday, which may mean you need to wait to tell your son.
You clearly care a lot for your dp and your step son so this must be very hard.
If your dp addressed the critical attitude and the debts etc, would you want to start again with him?
I do wonder if some aspects of our life may be making you miserable in addition to your dh. For example, you are far away from your parents. You mentioned 'I have a job and a few friends but no real support system', and 'my job is just a dead end job with no prospects'. You said of yourself 'self-pitying talk' (which is not the case at all).
You also mentioned 'a horrible, depressing atmosphere', 'I wanted to scream at him so I just need to hang on to all the horrible moments we've had recently and remember we are doing this for the right reasons'. You also said 'I haven't been very well over the past few months so have had a lot of time off.'
Is it possible you may be suffering from a little depression, or low mood, or post natal depression? Or just general disillusion with life? I am not meaning the other aspects of your life are 'worse' than your dp, or 'as bad as' your dp. I just mean you may need to change more than just leave your do to feel a sense of peace and well being.
You said your job is not very rewarding. Could it be a help to find a better job, one which stretches you?
Is there any chance you and your stbex might move to a location between your parents and his, or would that be the worst combination? Or perhaps having had some time near his parents it would be time for you both to start again near your parents if he can address these areas of his life that are such a problem?
I am not trying to persuade you to stay, i would not do that, I am just wondering if you have weighed it all up and think leaving him will make it all right! A separation from him may make you feel you have more answers and more understanding about what is not working in your life.
I wonder if you have tried counselling? There is sometimes free counselling available and certainly there are charities working with people in debt, to help people get debt free.
I think it is possible that moving out and away may be the shake up your dp needs, or maybe he will just continue in his ways and you will part for good and start a new phase of your life.
Whatever happens, please do address these other areas, work and friends, support network etc. These will all contribute to your general well being.
Trust your instincts but be open to new things and I wish you all the very best.