OP I think this is much more than just a dad supporting his DD and DGD. It's a DD taking the absolute piss out of her DF and he's letting her.
I don't think it's fair to say you're resentful of the relationship he has with his DGD. If it was just a matter of DP looking after his DGD 2/3 times a week so DD could work and DD collecting her at argeed time, I don't think you'd have a problem. It's DD dumping her child with your DP so she can go do whatever she wants that you resent, as would most people. It's watching your DP have the piss taken out of him that you resent.
Tell DP where your heads at with it all. That you're struggling to cope with her behaviour and how it's impacting your lives and mental health. That you love him but if this continues you can't see yourself staying. I'm sure as much as you're struggling with it all personally, that you do provide some support to him and he wouldn't want to lose that.
He needs to put firmer boundaries in place. If DD doesn't collect DGD at arranged time then he doesn't babysit for the next week or whatever.
While he is happy to take DGD to her dads he won't be going to collect things she has left there. No more hand outs. If she can't afford to feed DGD he will buy food so that she's not getting the chance to just spend it at the pub.
It seems a shame to leave the relationship if you love him and if the child's dad does get full custody this situation won't be forever.
If however your DP doesn't take any of your advice or put any boundaries in place by all means leave. He chose to be in a relationship with you. He has a responsibility to ensure you are considered as well as the responsibility he has towards his DD and DGD.