help gratefully received!

Hello all,
So today, I am appealing for help and advice on a somewhat sensitive matter. That involves my son and his grandmother, my mother-in-law. (Yikes, I know)
So to the problem, I have raised my son to be polite and to have good manners, not to hit or kick people, or throw things at people unless, it is in play and then only if the other person is as into the play as he himself is. So that's pretty straight forward.
However, having recently got my husband talking to his mother again after several years of no contact, due to some terrible things she did in the past, that are kind of irrelevant here, so I won't go into them, we have started to allow Kye to go and stay with her for short periods of time over his half terms. He has now been to stay with her twice and has come back behaving in ways that really aren't acceptable.
For example, the first time he went to stay with her he came back with a very bad habit of throwing things at people. Of constantly interrupting people when they are speaking, of having sulks when you ask him to please wait or to say please and thank you, something he always did without thinking before, and well he is just generally being a little brat.
Being that we have only recently allowed my husbands mother back into our lives, I am a bit nervous of bringing the subject up with her. However, I am feeling less and less inclined to let Kye go and stay with her because of this.
There are so many kids running wild these days I was determined my son wasn't going to be one of them and would learn about respect and manners. It's something that we instilled in him from day one and which till now was just second nature to him. I can't believe how quickly that all comes undone when he stays with his Gran, it isn't like he hasn't been away from home before, he has had countless stays in hospital due to his asthma and with my own mother and it has never changed how he behaves, I just can't understand what she is doing with him that is causing him to act out so badly.
At first I wondered if she was just overly spoiling him, which I figured having missed out on him so long was kind of understandable, but when she started to say that he needed to be toughened up, I started to have my doubts, especially as it seemed she was saying this because he says sorry if he knocks something over, or  drops or breaks something. Again something which to me is just good manners, but which she seems to feel is wimpy.
It's all a bit shocking for me we have only ever had compliments for how  polite Kye is, to be told that politeness makes him wimpy is hard to stomach.
So I guess this is why I am appealing to all you lovely's out there in blog land, what do you think about this and what do you think I should do.
love and hugs
Joss. xx