I know many Christians are fine with polyamory but the reality is that most are not. My daughter is christian and we used to be very very close. The fact that my partner is polyamorous has pushed us apart to a certain extent. I can understand how a christian mother would feel about her daughter getting involved in an arrangement like this and as the cat is out of the bag there is no way to stuff it back in. I can see why you're worried.
By this "paper you are willing to sign", do you mean divorce? I know that sounds drastic but it might be the only way to give your husband the woman that he loves very much. You could always find two houses next to each other or have an upstairs downstairs set-up so that you could all still be close. It might just be easier with life in a small town. The other option is moving, but M will still be without her family which is a big loss.
Having said all this, M did know what she was getting into from the start and she is an adult so you shouldn't have to feel guilty (very hard though). I too have a tendency to worry and feel responsible about a whole raft of things. I have a new little trick that is helping me with things outside of my control
I divide everything up into three areas. My business, other people's business and God's business. Sometimes it's hard to tell where something falls. In these cases I leave it alone until it becomes clear to me. Living with uncertainly is part of the polyamorous deal because you have more people to
consider and they have own baggage to deal with. My other new trick is living life one day at a time and doing the very best I can with that.