Had he cheated on me OR is the mistress making the hole thing up to wreck our happy family?

"Recently I found out my husband of 13 years (hes 36; and im 38) has been engaging in an affair with his secretary!! who is at college studying medicine..(she worked in a cafe he always used to go in and then he offered her a job part time in his dentistry.) . I got a call from a male unknown who told me about this affiar and that they were both at her house engaging in intercourse he told me the address;.when I went around there she was in a see through nightie and he was just walking out the door hugging her with a big smile on his face,,... our two beautiful children 6 &7 were out in the car listening to the hole ordeal. I approached him and asked him what he was doing.. he said that she was a troubled youth that he came to see just half and hour before he said he was goign dvd shopping. I was ropable.. furious. ... then I later returned to see this women who turned out to be 20 years old she spoke to me and told me she had no idea that he was married and no idea he had children she seemed very young and extremely attractive.. she was very elegant and lived in a nice part of town. . she told me everything about him and her over the past year and ... she new EVERYTHING about him... and his family. she said they would be out partying til 4-5 am on weekends, which was true because my husband would never come home until 11pm weeknights and 3-4am on weekends. I sometimes saw blonde hair on his jacket. (this women was blonde and no one in our family is blond).. after returning to our home he denied the hole thing ever happened just kept saying she was a trouble youth obsessed with him and that he never touched her. she told me of the coulour of his underpants and that he had a small patch of hair on his lower back.. she new that he had smalll red spots on his chest and she showed me a ticket from when he'd taken her on a holiday to queensland.. continuing to deny anything to do with her apart from friendship and that she was his secretary and nothing else he said he loved me.. and should i beleive the man i love? and keep a happy family or give up on him?? is he lying or not? he kept denying all the things she said and kept reiterating she was obsessed with him and she was crazy (apparently bi-polar although she seemed like a nice girl from a nice girl from a wealthly family)... ive kicked him out to live in a neighbouring area but he still comes and see's our children... what should i do? let the man i love (who cheated on me supposedly) back into our home? and around my children.. we were such a happy family (we really were I can't believe this could happen) why did he do this??...