You don't state if your are married! If there is another woman in the picture, that mean he (b/f or husband) is being dishonest, untrustworthy, opportunist and unfaithful. This is unexceptable behavior that is not to be tolerated. In this case, trust neither him or her. You tell him that the relationship is over unless he proves to you that there is nothing going on. That means, he is to confront her with you or whatever he has to do, to prove to you that it's over or it's over. I would not stay with a man that is being unfaithful for the sake of my children. That to me is not an option and the children suffer too living in a dysfunctional, unhealthy environment with dishonesty and witnessing issues with there parents.
This has to be knicked in the butt so to speak immediately. Tell him either she goes or his family goes (that's you and the kids) and put it on him to prove that there is nothing going on. Do not accept this and he is financially responsible to support the kids.
Oh, I hate when someone comes along and messes things up. How is your relationship overall? Do you get along well? I think I would talk to him again about what she is saying. And I think he should know that if he is thinking of this woman in any kind of way inappropriately, that you are on to him and will find out. And if he doesn't have inappriate feelins torwards her, that she is causing trouble. She needs to be OUT of his life and yours. Period. She's a dangerous woman either way. Men who want to cheat will, but not right in front of our eyes. I'd then start working on this relationship WITH him. Ask him questions like, what can we do to be a happier couple? I hope this all works out and counseling may help sort out if this relationship will go for the long haul!
Are you married? That would be my first question. Secondly, I would be having a frank conversation with HIM, tellin him what she has said and pin him down on it. Why would you believe her without talking to him. Then if he continues making you feel like somethin is up, it probably is.