I really empathize with you Sherilrose, as I have a similar situation.
Unfortunately nothing you do or say will be ok with her as I suspect she is jealous that her son loves someone more than her. If she is anything like my MIL she will use every opportunity to undermine you and alienate you, while maintaining a cloying relationship with her son and when possible her grandchild. It is called "conquer and divide" and is classic bully tactic.
I had ANOTHER incident with my hideous MIL today and after speaking to my own mother, I have decided to heed her advice....
You will never change her, so let it go and think " there is no point having a peeing match with a skunk!". Pretty crude sorry, but imagine your mother inlaw as a skunk - it feels good eh!
Her objective fails if she has no power over you.
Good Luck!

Matt and i had our baby girl 10 months ago.
I had been told by matt's ex's what a handful his mother could be, but i brushed it off thinking she was just hippy.
When i had Marley, Karol came to live with us for a couple of weeks to "help". She went through all of my baby presents and boxed away products she didn't think was suitable eg. polyester outfits, baby soaps, etc. She lectured me about immunisations and having an epidural which helped me through my 14 hr hectic labour.
She would dictate when i could and couldn't nurse my own baby. If i would go to pick up Marley, she would say no, you look tired, go and lay down. When the community midwife would come and visit, she would ask me questions about my baby and my body. Karol would interrupt and answer for me. At this stage, i wasn't very assertive as she can be really sensitive and play the 'victim". Matt doesn't see how this behaviour is rude and interferring, as he thinks she trying to be helpful.
Since then, i have really tried to be more assertive with her.
She's stayed over, constantly does the washing, makes food, walks marley. I've asked many times when she visits, if she could please not do the washing or anything, just make a tea and play with Marley. She took Marley to swimmimg lessons and i told her not to put her head under. She hadn't done it before and i was saving it for Matt. She came back saying how she went under three times. She put all of her perfume oil all over our furniture so it would "smell nice". It reminded me of a dog marking its territory.
She's constantly making comments about how tired i am, and how i shouldn't work and study. I should be with Marley at all times.
She would come and "help" me with the grocery shopping. I was not allowed to hold Marley the entire time. When people would make comments about how cute she was, she acted like it was her daughter!! Everything i put in the trolley, she would pull back out and tell me how bad it was and how it gives you cancer!
i could give you another hundred examples where she is being vindictive, manipulative and controlling.
But finally, i asked her to sit down so we can talk about boundaries and to ensure she realises that i'm marleys mother and its our home, not hers. We were open and i really felt she understood that when she makes suggestions, thats just another piece of advice and i could take it or leave it. I was so happy with the way it went, i told Matt that i had a good feeling we were going to have a better relationship now we both knew where we stood.
The next time she visited, she told Matt she didn't want to stay at our place because i give her bad vibes and intimidate people to get my own way. I was crushed, but very angry at her. She offered to look after Marley when we were both at work, and sneakily tipped out our baby panadol because she "doesn't agree with it".
She's visiting at the moment but staying at Matts cousins place. I've made new rules: she is not allowed to be with Marley unless shes supervised. This is because she doesn't feed her the food we want her to eat (its healthy - she thinks cheese and breads are bad for her. All she feeds her is paw paw!) I've said she is only allowed to visit when Matt is here and she's not allowed to touch or rearrange our things. She can be in our home, just like any other guest.
She has been over twice and continued to do what ever she wants. She does not listen to me, she has no respect for me. Matt can't see this and thinks im being nasty. I just don't know what else to do. Its definitely taking its toll on mine and Matts relationship. I've caught her out lying so many times, i just don't trust her anymore. Even when she's telling a story, i sit there thinking, "hmm... i would love to hear their side of the story".
Can anyone suggest any other ideas where i don't come off looking like the bad guy? I'm so sick of her playing the victim and making me out to be the culprit.

My husband and I are in our early 30s, have been married for two years and we have a 9 month old daughter. His mom has always been standoffish around me but, I felt, we were making progress. She's very much a control freak and is constantly telling her kids what they need to do regardless of their own interests. Everything was okay, not good, but not necessarily bad till we got pregnant. My husband was finishing his doctorate at the time and this was a bit of a surprise. Still, we had a plan, and we've made a great life for ourselves. When he told his parents about the baby, they FREAKED out! His mom couldn't understand how we could make such a terrible mistake and know he wouldn't be able to finish school, etc. They didn't once acknowledge the pregnancy to me until I was 8 mos. along. Obviously I was very upset but didn't want it to turn into a huge argument for my husband's sake. Then, our beautiful daughter was born and suddenly they think they're the best grandparents ever. His parents came in for a visit last fall and it went okay. I dealt with some snotty comments and her telling my husband where He should work and where HE should move, etc. Nevermind, his wife and child, but whatever, I dealt with it. But his mom is just getting worse. We've lived in our house for 8 mos and she's called our home phone once! She will only text him on his cell then wait for him to call her. About a month ago, I was away visitng my family and he had a heart to heart talk with her about how much it bother's him that she never calls and he doesn't feel like she's making an effort, etc. He asked her to please call me. That was a month ago and she has yet to call. The last straw for me was this past Easter. Easter Sunday came and went with not even a phone call from them. My husband was really upset and he finally called them at 10:30 pm to check in. His mom was supposedly bawling because she was so upset that we were here all alone. So upset that she couldn't call??? Whatever. So the next day, I get a package from UPS from her addressed to our daughter. I thought that was really sweet. So I opened and there were a few toys and some clothes, etc. So, thinking I'd do the polite thing and be the bigger person, I called her to thank her for the package. She didn't answer, so I left a voicemail. The week comes and goes and not return call from her. The following Friday, my husband calls her to check in and she tells him that the reason she didn't call me back was because she was so upset and hurt that I opened the package without him present. She was so hurt by it that she couldn't bring herself to call me. I am losing my mind with this deal and am really worried about the toll it's taking on my marriage! Any advice or words of wisdom is much appreicated!