The envelope was the other £50,000 which Ted had hidden somewhere. He isn't John's son, by the time he met Ann Marie, John had already been born. We discovered that Ted feels guilty that the contact Ann Marie had with him as an informant led to her death. I think he did tell the chap in prison that John Corbett was UCO and that led the OCG to kill him - hence Ted's guilt and decision to give the ill gotten gains to John's widow.
kittylester, the armed police were set down by the senior investigating officer. She believed they were safe as they'd caught H. Thank goodness for Kate n Steve.
Kate had the best line of the series 'stop making a tit of yourself and p*ss off".