Given that your talking to the children hasn't stopped the bragging I would probably say something to the mom with the idea. I assume you knew that my daughter would see the balloons and girls going into your house for the party you weren't planning to have. Yes as child xxxx's mom you have the right to invite whomever you want but I do not appreciate the way you lied to me about having the party in the first place. However that is not what this conversation is about. I have had to speak to your daughter and child VVV that was also invited about hurting other children's feelings by bragging and making them fell bad and so far they have not stopped. Starting tomorrow I will need to lay down the law in a tougher way because this is not the kind of behaviour I want any of the children to think is ok. I would suggest you speak with your daughter tonight about what she is doing, how she is making the other children feel and remind her that the consequence will be that she goes to time out for 3 minutes everytime she does not play/speak nicely. Then maybe add something like I am glad your daughter has a new friend to play with. My daughter has friends outside daycare as well but while all of the children are together in daycare they are each other's playmates and need to show respect for the feelings of each other.

There was something in what you wrote about the mom saying something negative about your daughter and the friend able to repeat it. That is the part that somewhat needs to be addressed. If child is such a problem why does she continue to bring her child to your house for daycare. At the same time is it time for the girls to both move on. Are they at the same school, have other mutual friends, what was their relationship like all Spring in terms of after school.