We just adopted two little girls who are my wife's great nieces. It is a similar situation. The parents are not in prison right now, but have been in and out of jail for the last couple of years. The girls were taken away and put in foster care. As with your situation, nobody else would take them.
We have had them for over 6 months now, and we are all getting adjusted very well. We have permanent custody, but the parental rights have not severed. So it is possible that they can try to get their children back in the future. If they were to get their children back, we would be devastated, but I still feel we are doing the right thing. The way I saw it was that if we are in a position to help these children (who are the only truly innocent people in this situation), we have to! Sure we might get hurt , but we are still helping the girls, and that is the most important point.
As for the process, I am in the US, so I am sure the process is different. Sorry I can't help. Good luck! You are doing the right thing!