Between loving my wife and respecting her mother

As a young man in his middle 30s, married with two lovely boys, people would think that I should be very happy, especially now that things are in very good shape for me financially. But this is not exactly the case.
My heartache actually started when I got married eight years ago, and this had nothing to do with my wife as she is truly in love with me. I also do not think I can live without her. The thorn in our marriage has always been my mother-in-law.
Ever since our dating days, I had always noticed that I was never well received by my in-law-to-be. She usually insulted me with the way she used to talk to me. At that time, I felt she was only being careful about the kind of suitors her daughter was getting close to. My assumption was that once I got married to her daughter, she would soften towards me and know that I truly loved my wife. In fact, during the courtship, my wife and I broke up twice due to the fact that her mother did not want me. Her slogan was, “You are not up to standard. You can’t marry my daughter.” But because of the love I had for my wife, I always tried very hard to please all the members of her family with everything I had. At times, when the pressure became too much for my wife, she would become very cold towards me, though she often softened shortly afterwards when she returned to her senses.
My family noticed my in-law’s coldness at the wedding and had their own reservations. But because they knew that my wife loved me and that her mother would not live with us, they reluctantly let go. Occasionally, when my mother-in-law came around, we tried not to mind her actions and utterances, knowing that she would soon leave. She was always delighted to rebuke me at the slightest opportunity. She kept saying, “I have told you that he is not up to your level,” each time she noticed any slight disagreement between me and my wife. I had to warn my wife seriously to stop reporting me to her mother.
The problem reared its head again when we began to make babies. We had two boys within a space of three years, and though, we were doing well physically, our relationship was troubled. Our mothers usually took turns to help take care of the children and things were going well initially. I learned to ignore my in-law’s insults, knowing that it was just a matter of days before she would leave. But one day, she had a fall in her home and had to come over to our house for a long time because there was no one to take care of her. As a loyal son-in-law, I did all I could to make life easy for her while she, on her part, never saw anything good in what I was doing. She complained endlessly over virtually everything. It could be that the food was not nutritious enough or she would say her needs were not being met. It got to a stage that my wife and I started having problems, which, in turn, spread to the larger family. Members of my family, who had noticed my mother- in-law’s endless criticisms and insults, and my wife’s changing attitude, also became hostile towards her. With time, my wife moved out of our matrimonial home, abandoning the children with the maid. Thank God, my mother immediately took charge and relocated my boys to her house. My family tried to reconcile us but my in-law was inflexible. When my rent expired, I moved to our family house because I could not stay alone.
To my surprise, my wife came around to take the boys but I refused to release them to her. Then she started coming to spend time with us and at times would sleep over. Before we knew it, we had resumed our husband-wife relationship again, but this time, with a twist, as I insisted on staying in the family house against my wife’s wish.
My larger family had no issues with the reconciliation, but also insisted that we must stay in the flat given to us in the family house. They were worried about the next step my mother-in-law would likely take.
I love my wife and children but I agree with my larger family that we should stay in the family house. Or what should I do?