I have the same thing with my MIL. Luckily she lives in Toowomba and I am in Canberra, so it is easy to make excuses when we do see her.

In our situation, I know the kids would be safe (she is always looking after all of my neices and nefews - there are alot of them), but I feel really uncomfortable with her parenting methods and the way she interacts with kids. It is not something I can really describe, but I just cannot feel comfortable with her looking after my kids, until they are a certain size/age and have more independance.

I have discussed it with DH, and although he would likely leave our kids with her without even thinking about it (he is used to her parenting, afterall it is his mum), he certainly understands what I mean and why I would feel uncomfortable, and so we have agreed not to let her babysit until the kids are older.

I think talking it out with the father is important, because these are his parents afterall.