This man's estate will be divided under the Rules of Intestacy if no will is found. This means that your nephew would share in the state as if he were legitimate. The division of the estate is as follows:-
If there is a surviving spouse and surviving children:
The spouse takes:
The personal effects (the deceased�s personal belongings and chattels).
�125,000 free of Inheritance Tax.
A life interest in half the remainder of the estate.
The children take:
The other half of the remainder of the estate.
The capital comprising the spouse�s life interest fund when the spouse dies.
So unless this man left a reasonable estate your nephew will not get much . It is a clear example of how much better it would have been if this man had made a will.
However it would be worthwhile consulting the nearest Probate Registry about the letter he left and whether it has any weight in law. You could find your nearest Probate office on this site
http://www.lawontheweb.co.uk/basics/probateoff ices.htm