I don't know why your W has to have supervised visits with your D, but if that is the case....maybe you are doing the right thing....IDK.
Okay, I'll take a shot at your letter.
I will no longer accept your A and continue to keep the truth quiet about the damage it has done to our marriage and our family. Good
Having a constant reminder of the life we once had and the future that is now gone does not allow me to move on with my life. I cannot forget the last 7 years of my life with you and need time and space to heal. (I would leave this part out b/c it makes you sound weak.)
I am concerned that D is expressing anger and resentment that you left and she too needs time and space to understand her feelings. (Would it sound better to say, "By leaving, you have caused D to have anger and resentment. She needs time and space to understand her feelings and to heal over our family being torn apart.)
I have made many changes over the past few months and I'm determined to continue my growth into the best Father and man that I can be. Good
I have been thinking about all of this and I have decided that there should only be contact between us for two reasons. To either discuss the reconcilliation of our marriage or the potential end of our marriage. The first one I can't discuss while you have invited a third person into our marriage and the second one is best left to solicitors I think. In the meantime, I must move on with my life without you. (Just leave off the first part of the sentence and say, "I have decided")
I think either putting it in a letter or email would be okay. That way, it can be controlled and not get into a R fight. Also, you can have a copy of what you send in case there is ever a dispute about it. It sounds good, but as I've said before...just be sure that is what you want to do and that you can stick to what you've said.
It is not about what you feel should work in your M. It is about doing the work that gets the right results. Do what works!