This is a dilemma and it is in my view for the patient to decide. If the patient's notes say that she has stated that she doesn't want to be told of a life-threatening illness, then at her age, I would hope the clinicians will abide by that. However, the decision has to take into account the ability to make the decision under the Mental Capacity Act (and you say she is fine under that heading).
Q: how would you know that the daughter is conveying the mother's wishes to you, and not just saying this because she thinks it will distress her mum, believing ignorance is bliss? Who is she protecting, mum or herself, from the inevitable sadness at the diagnosis?
This brings poignant memories for me - my own mum was 93 and still had all her marbles when she died, but all along she wanted to be fully aware of what was happening, so she could come to terms with her leaving us after a long and full life, and say her goodbyes properly to all the family while she still could. Sorry to bring a personal story into your scenario, but this was real life - we could not have wept for her when we said those goodbyes, if she had not known what was happening to her.
Your lady still has the right to have a full say in her subsequent treatment, and that won't happen if she is not part of the discussion in full understanding of her medical condition. She may decide that she doesn't want treatment or surgery, and just to let her illness run its course, or she may want every treatment available to her at her age.
Good luck with the essay - let us know how you get on.