I have recently gotten married, just less than four weeks ago. The ex-husband of the lady I married was in prison the entire time we were dating. About a month after we set a wedding date we discovered he would be getting out shortly after our wedding date. We went ahead with our wedding determined that we were not going to let him have any influence over our relationship. Since he has been released he has acted in a respectful manner and hasn't caused any problems. (They have four kids, avoiding contact is not an option). My problem is that I have heard all the awful things he has done in the past the my wife and the kids and everyone else he interacted with. I thought I could handle everything, but the first time I laid eyes on him I was filled with absolute disgust and rage. I know these feeling are not healthy and have been praying daily about this situation. Its hard to hear "my kids" call a convicted felon daddy. My wife and I have all our feelings in the open so she knows how I feel. I just wanted to put this up and see if anyone else has any comments.
You are in a difficult situation; which will require much dependence on the Holy Spirit.
Your first responsibility is to provide a healthy home and family for your wife and her children. You cannot restrict them from calling him their Daddy, for that is who he is to them.
Remember that Christ can redeem even the worst sinner. So, pray for him and seek God's greatest blessing for him - that he will have his heart completely healed by being born of God's spirit and changed into a new creation in Christ.
Do not be offended or jealous that the children call him Daddy. It does not make you any less important in their life. It is a very hard thing for a child to realize that their parent has done evil things. Just focus on living a Godly witness of grace and truth every day in your own life - which will be a powerful support to them. Just be sure that you are genuine.