Firstly we are based in England and have a copy of a solicitors letter which is an simple trust document between my parents and my Gran stating that my Gran has a 1/3rd stake in the family home because she put up the majority of the money many years ago.

Then she should've had her name added to the title deeds as 1/3 owner.

secondly we have a copy of my Grans Will which states she has left everything to her 3 and only Grandchildren (myself and 2 siblings).

Therefore in theory I should own 1/9th of the family home.

Then your name should be on the title deeds as 11.11% owner.

If this happens and then the equity release company tries to take ownership of the property how can I stop them and tell them actually my parents never really owned the last 1/3 of the property in the first place. and that this cant belong to the bank as I and my siblings never signed up to the scheme and myself and one other of my siblings have been trying to get bought out of the house for years.

On paper, your parents own the whole property. Neither you or your siblings own any part of it. If the house is repossessed, your parents will still owe you and your siblings the money your grandmother lent/gave them.

We would rather not get solicitors and lawyers involved as I can imagine there won't be much value left in the house after their fees have been paid and it will tear the family apart even more.

Unfortunately that's the only answer here. Are you in contact with the solicitor who set up the original trust?