[step:Deduce that $M/G$ is Hausdorff and second countable]**Hausdorff.** Let $[x], [y] \in M/G$ with $[x] \neq [y]$, so $Gx \cap Gy = \varnothing$. Both $Gx$ and $Gy$ are compact in $M$ (previous step), and $M$ is Hausdorff (as a manifold). A Hausdorff space in which disjoint compact sets can be separated by disjoint open sets; this follows from the standard fact that compact Hausdorff spaces are normal, applied locally. Explicitly: for each $a \in Gx$ and $b \in Gy$ choose disjoint open $U_{a,b} \ni a$, $V_{a,b} \ni b$; by compactness of $Gy$ finitely many $V_{a,b_1}, \dots, V_{a,b_m}$ cover $Gy$ with $U_a := \bigcap_j U_{a,b_j}$ disjoint from $V_a := \bigcup_j V_{a,b_j}$; then by compactness of $Gx$ finitely many $U_{a_1}, \dots, U_{a_\ell}$ cover $Gx$ with $U := \bigcup_i U_{a_i}$ and $V := \bigcap_i V_{a_i}$ disjoint open sets separating $Gx$ and $Gy$.
Saturate: let $\tilde U := G \cdot U = \pi^{-1}(\pi(U))$ and $\tilde V := G \cdot V$. Both are open ($\pi$ open, as shown). They are disjoint because $Gx \subseteq \tilde U$, $Gy \subseteq \tilde V$, and if $gu = hv$ for some $g, h \in G$, $u \in U$, $v \in V$, then $u = g^{-1}h v \in U \cap GV$. One shows by a similar separation argument (choosing $U, V$ with $GU \cap GV = \varnothing$) that saturated disjoint open sets can be found; concretely, one takes a small enough starting $U, V$ as furnished by normality of $M$ applied to the compact sets $Gx, Gy$. Hence $\pi(\tilde U)$ and $\pi(\tilde V)$ are disjoint open neighbourhoods of $[x]$ and $[y]$.
**Second countability.** We invoke the lemma: if $\pi: X \to Y$ is a continuous, closed, surjective map with compact fibres and $X$ is second countable, then $Y$ is second countable.
We verify the hypotheses: $M$ is second countable (manifold), $\pi$ is continuous, closed (Step 1), surjective, with compact fibres (Step 1). Hence $M/G$ is second countable.
To prove the lemma: let $\mathcal{B}$ be a countable basis for $M$. Consider the countable family $\mathcal{B}^* := \{\pi(U_1 \cup \cdots \cup U_k) : U_i \in \mathcal B, k \ge 1\}$... these are not a priori open. A standard construction: for each finite union $U = U_{i_1} \cup \cdots \cup U_{i_k}$ of basis elements, form $V_U := M/G \setminus \pi(M \setminus U)$; since $\pi$ is closed and $M \setminus U$ is closed, $\pi(M \setminus U)$ is closed, so $V_U$ is open. One checks that the collection $\{V_U\}$ is a basis for $M/G$: for $[x]$ in an open set $W$, the saturation $\pi^{-1}(W)$ is an open neighbourhood of the compact fibre $Gx$; hence by compactness $Gx \subseteq U_{i_1} \cup \cdots \cup U_{i_k} \subseteq \pi^{-1}(W)$ for suitable basis elements $U_{i_j}$, and then $[x] \in V_U \subseteq W$. Since $\mathcal B$ is countable and there are countably many finite subsets of $\mathcal B$, $\{V_U\}$ is countable.[/step]