older child "safety" in open adoption/foster situation

Hi. This is my first time on these forums but i am in need of help. About a year and a half ago I got to know a little girl now my daughter in our neighbourhood who was living with several others including siblings (20 people altogether) with a lady of 74 in a 2 bedroomed house. Older lady (foster mother 1) has been fostering this girl since birth with no plans to adopt. There weere lots of issues of emotional and physical abuse and neglect at that house and we decided to intervene at girl's request. Girl and my partner and I got attached and since June last year (6 months) now we are fostering her with a view to adopt. She is now 9. She is a wonderful child and we love her so much. Being moved from that original foster home was traumatic but our girl was happy to make this change. She has adapted well to life in our family - she is our only child for the moment. As well as you can expect. After 3 months she asked if she could visit foster mom 1 again and since some of her half siblings stay there, and since she views this woman in part as a mother (being fostered from birth) we allowed limited visitation to help her heal the painful wounds with this lady in a situation where she is not getting abused anymore. Foster mom 1 is a complex figure who fosters kids for money - although misguided she does love them although her expression of it is frightening. She is also extremely manipulative. About 2 weeks ago my daughter went for a visit and I got a terrified call to say that her birthmother has just showed up at the older lady's house. Transpired later that foster mother 1 asked my daughter to lie to her birthmother about where she is staying these days. She was also told by foster mother 1 that birthmother will fight for her and take her away from us. Birthmother is a prostitute with 4 kids all in foster care, she is mentally unstable and has serious alcohol and drug issues to. She is in a mental facility most of the time. Needless to say this has causes my daughter to experience violent nightmares since then, she is unable to be alone for a minute even in daytime and has major anger issues with peers at the moment. Today foster mother 1 has requested my daughter to come for a visit again. I feel as a parent it is my responsibility to take this decision for my daughther as this situation with manipulative foster mom 1 who has no idea how to make a child feel safe and proteced. I feel that for a time there should be no visits. What are you views. How should I proceed? I want to do what is best for my daughter. We have an extremely open relationship and everything is discussed with her. We dont lie or hide from her and we are trying to teach same to her. But foster mom 1's influence is strong and is making my daughter feel unsafe and torn. Thanks for your time. Aletta