Hi everyone. Thanks for all the advice.
It's been 2 weeks now since the new kitten arrived and Mesha's behaviour totally changed towards the baby.
She now acts like a mommy with her, follows her everywhere, sleeps with her, grooms her and is VERY protective towards her.
Looks like I went into panic mode too quickly.
She is also allowing us to pick her up again and pet her. And for some reason she is actually more relaxed towards all the other cats than before we got the new baby.
So, looks like a very bad situation actually turned into something good.
I'm so happy for her; I hated seeing her so stressed.