Cheeky greedy bitch !
And - apologies if I cause offence - your MIL needs a damn good slapping too.
Where on earth is MIL coming from if she thinks a couple who live within their (much lower) means are expected to help out a couple with far more income and no children ?
Does she honestly think you should have your children (effectively) go without so a spoilt little madam can have her fairytale princess day ....... at a cost of £20k. The selfish little sow could have a great wedding on half of that, or even a quarter.
And, as you say, there was no expectation the other way when you got married.
I'm sitting here in disbelief at this, yep, you do come across the most extraordinarily selfish, thick-skinned thoughtless people sometimes, but to find two of them in the same family is mind-boggling. Am assuming SIL is DH's sister ? ... and MIL's daughter ??? (not SIL on your side). Has MIL always "dreamt" of the big, in your face, white wedding herself - is that why she's being so unreasonable ?
Can fully understand family "helping" - and think that's really nice - as in doing flowers, dressmaking, catering, offering up their big back garden for a marquee etc., but this is downright greedy especially when you aren't well off and have children to think of. Hmmmm ..... let me see, a couple of thousand invested for the kids, or a couple of thousand on Princess Greedy Guts' string quartet and heart shaped balloon extravaganza ???? Hmmm, will have to think about that one.
Have these women shown tendencies like this before ?
I think it's admirable you're worried about a rift, but also feel you are effectively being emotionally blackmailed here which is a dreadful thing to do. They can't get blood out of a stone, and, even if you had spare cash somewhere, you just don't go around making demands like that.