When you realize that it is never going to work out, and that you are not happy. You have to live your life how you want and be happy otherwise life will suck and you will give up on it. I realize that you have children and all, but you can't live being miserable. Don't worry about what you might find later. Just realize that you aren't happy, and you have to do something to change that, otherwise you will just live a horrible miserable life. I hope that things get better for you and that you become happy. :-)
Well first off I can tell you from experience that I have faced a situation at the age of 14 where I faced a hard choice such as this. My mother was taken from me, so I lived with my step-dad and step brother and sister. Me and my step brother were very close. My step dad made me choose between living with my family (my mothers side) and never see any of them (including my brother and best friend), or live with my evil step dad and his evil girlfriend and never see my real (mothers side of family) ever again. But by that experience and what I learned from what you just said, I will simply say this: If he said that then he doesn't care about you or your kids anyway. It may hurt them now, but you are doing them a favor by taking that a$$ out of the picture. It sounds like he will do more harm than good in the long run. You are killing yourself, slowly....trust me, I know.
If in the 7 years you've been together you've spent more time crying, fighting, arguing than you have loving and growing with each other than there's something better out there for you.
Is it worth fighting for? Are you happier without him? Is he putting in any effort? What do you have to lose? These are the questions you should ask yourself.
I'm sorry you are going through this but it's a tough situation you are in. Firstly, you need to gain some independence. I know it's hard but start slow. Do you have a job? Friends that can help you through this tough time? Being miserable is not healthy for your kids either. What is it that you don't like about the relationship?
I hope today was a better day for you. You are stuck between a hard place and a rock. It's not easy to leave in this situation. You have no money and the kids are gonna miss their dad and the family being together. How about discussing a separation. I hope talking about it makes you feel a little better.
If the sheer thought of him makes you well up with tears and serious depressive thoughts and sadness, it's time to leave.
When you have to ask if it's time to give up on a 7 year relationship.