I am glad that you have (hopefully) got yourself sorted out. If she does not pick the kids up from school. DONT take them home with you - leave it to the school to sort out. It is a bit different if you are just doing each other a favour now and then which often happens amongst mums with kids in the same class, but this woman was basically taking a liberty - she is getting �24 worth of childcare for the odd bottle of wine.
Technically you were not breaking the law having the kids - the key part of the law is "for payment or reward" unless the reward was roughly equivalent to the cost of childcare, it would not be counted, so at the end of the day there was nothing wrong in what you were doing, other than the fact that you were being bullied into doing something that you didn't want to do.
I bet if one of your kids was being bullied, you would sort it out, it is the same here except it is you that is being bullied.
You need to say no and mean no.
Remember, if she has not made arrangements for her kids tomorrow - don't pick them up - you don't need to make any excuses. If she asks you stick to your guns - you don't need to give any reason other than the fact you don't want to. What does she do on the other days?