You agree to include them, settle them all down and say to the children: "Great to see you. Hi kids!" - and to the playgroup staff: "As you can see, these regular story-times are very busy so we need to see if we could organise something specially for you. Let's settle the children down for now and if you can you hang on for a few moments after the story-time, we can sort something out for the playgroup".

Feedback

First impressions are important - it's great that you've been so flexible and welcoming - but you'll need to sort out a strategy for working with them in the future.
The playgroup leader is obviously very keen to bring the children to the library and getting them to listen to stories on a regular basis. This is a good start to developing an on-going relationship with them.
Working with a big group such as this can be a problem - there will less opportunity to encourage less forthcoming children to participate - and managing the space might be an issue, especially in a smaller library. But it's worth bearing with it in this one-off situation - the longer term benefits of developing a relationship with the playgroup will far outweigh the short-term inconvenience!
Make sure you include a good mixture of listening and activity in your session to try to meet all tastes - eg. play rhymes for everyone to join in (and let off steam!) and tried and tested stories which you like to use and know how to get children involved in.

Look round the picture books - read through and practise the ones you like.

Try out the stories you have practised - and build up your storytelling collection.

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