Nessie is a species of Mosasaur that survived in Loch Ness and only surfaces every 20 years to mate. Unlike most of the creatures in the series, Nessie is not a mutation. Nessie and her species lived in peace until her baby was kidnapped by a scientist. H.E.A.T was visiting Scotland, and investigate. Zilla appeared and the two battled. It wasn't until later that Zilla discovered Nessie was only attacking in order to find and save her baby. Zilla then would team up with Nessie and help her rescue her infant.
The Nessie creatures are likely to be a reference to the Toho kaiju, Manda, as the two have long, serpentine bodies and have aquatic habits.
Nessie is referred to as a "mosasaur" in her debut episode. This is, however completely inaccurate, as Nessie resembles a classic sea serpent more rather than any known species of Mosasaur found in the fossil record.
Related to the above information, the Nessie shown in the episode resembles the cryptid known as Cadborosaurus. Actual Nessie sightings claim it looks more like a classic Plesiosaur.
Nessie is also one of the two kaiju from Godzilla: The Series based off cryptids, the other one being the Yeti. The only difference is that the yeti turned out to be a machine, while Nessie turned out to be real.