My husband also had a very close female friend years ago. They were supposedly just friends, but my husband told her everything. They also talked for hours a day. They have the same hobby, where they saw 2-4 /week /3-8 hours. When I found that out, my husband practically started yelling and raging at me. I demanded that he end the friendship. Our children were 20, 17 and 14 at the time. We also had a little over a year old boy. (Who was placed with us when he was 6 months old). Our biological children were furious with their father. Our children told their father, that they would NEVER have anything to do with him again, if their father did not end the relationship. Our oldest daughters also said that they would change their last name to my maiden name. The children asked their father, if their father wanted to be with this woman or with them and me? Our oldest daughter had just found out that she was pregnant. She also told her father that, if his father didn't end the relationship, he would never see the baby. My husband knew, that they was serious. My husband ended the relationship.
Can your children talked to their father and told him what they think about their father's "friend"? I think it would be a good idea.I think your children are loyal to you too.
Let your children tell him, that they want their family back and they want, that your father end this ridiculous and unhealthy relationship with this woman. Your children could also tell him, that in their opinion, your father is putting this woman before them and their family. And if their father doesn't understand to end this ridiculous "friendship", your children will no longer want anything to do with him. Since this situation affects them and may continue to affect them in the future, it would be important for the children, to also be able to tell their father what they think.