i don't have kids but had fate dealt me a slightly different hand, i easily could have been in this situation when i was your daughter's age. she may be coming up on 18, but she is still a child. if you are anything like my parents, you prolly have to keep reminding yourself she isn't twelve anymore
i've read the entire thread and imo, your best bet is to give serious consideration to what you want (for yourself, for your daughter and for your grandson). does it really matter to you who the father is? if not, tell your daughter it doesn't matter. if you think it is important, tell her why but don't shove it down her throat. there are a lot of very good reasons why she may want to find out. what happens if she needs to know the father's medical history for her child? what is she going to tell him when her son asks about his father? if she manages to get by with a vague response as he gets older--what happens when he's an adult and decides he wants to look for his father? she's denying her son a lot by not knowing, even if she has no desire to enter into a relationship with the father or get child support from him.
if i were in your shoes, i know i'd want what was best for my daughter and grandchild. to me, that means i have to be in their lives. some may say let her go her own way, but personally i wouldn't be willing to take that kind of risk. i know i don't always take the path my parents would have chosen for me, but at least i (now) know that they will support me in whatever choice i do make. there are a lot of bad places for a teen mother and her child to end up and i really don't think you want that for your family. tough love may sound like a good idea to some, but if things don't work out ok, are you going to be able to live with that choice? could you go on with no regrets never knowing what happened to your daughter and grandson? not knowing if they were alive or dead? if you can, then by all means take that path if you feel it is the best decision you can make. but if you don't know with certainty that you could let her out of your life forever and not ever feel responsible for what happens, then i suggest you do whatever you have to do to keep her in your life.
i know your daughter is angry at you. maybe she even knew that this guy wasn't going to be the dad and that's why she was so angry you insisted on the paternity test. right now, you need to let her know where you stand on the situation. if you don't care who the father is, tell her that. let her know that you will support whatever decision she chooses to make on this (keep in mind that while you may only want what you feel is best for her, those are decisions that she will also have to live with and if they aren't what she wants that is going to piss her off even more).
there is so much your daughter and grandson need from you, and i don't mean money. you have a lifetime of experiences to draw from as a parent and a person. my parents are in their 50's, their parents have passed on but i
know that not a day goes by when they don't wish they could ask them for advice about something. parents are one of the most valuable resources we have, even if we don't always realize it.
my best advice to you is to offer to be her father. support her (this doesn't mean financial if you aren't comfy with that) and love her. find out what she wants for herself and the baby then help her find a way to get it. if that means babysitting while she goes to class or studies, do it. if it means helping her find a job or career that will allow her to support her and her child while still doing something she takes pride in and enjoys, help her. if it means watching her fall flat on her butt as she tries to figure out her life, watch her and then help her back up. be her shoulder to cry on, be there to give her love and support, be her sounding board, be whatever she needs you to be. you're her dad, that's what you're for.