Step 1: have a job in the UK (or be financially independent in the UK). It's critical to be employed.
Step 2: call the EEA help desk in Croydon and tell them you need a family settlement permit. They will know what to do next. At least I *
HOPE* they know what to do next, if not revert back to this board.
Step 3: Wife & kids show up at the British Consulate and get their 5 year clearances for free
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Step 4: After they arrive, they apply for residence. It means your wife can work or whatever.
That's all there is to it. Important to note that if you go this route, they are on a 4 year trek to ILR, whereas with a spousal, it's a 2 year trek. Plus on the spousal, you are out the application fee multiplied by the number of children you are sponsoring.
You will need to weigh the pros and cons of it yourself...