Sadly that is the MIL role these days. Otherwise, your contribution of £3k is purely conditional and surely they will be paying for quite a bit of the wedding themselves too.
It is their day and the offended feelings of relatives they don't really see should count for a lot less than the feelings of the couple themselves.
You don't have to be the "peacekeeper" anyway. Why should you be responsible for whether these people who are not really as connected to the couple, taking offence? Face up to them. If they can't behave themselves and indulge their feelings in taking offence, that is their problem and not yours, and definitely not the couples. You can easily explain that it's out of your hands, has nothing to do with you and that they are having a very small wedding due to the financial crisis and they are saving for housing. Most reasonable people would accept that.
Think about the extra cost/effort/time and sheer hassle that might be required if additional relatives are added to the guest lists. If you plan a careful guest list for a party, you are setting the tone for how you want that party to be. If an additional group comes it, it could change the sort of wedding they wanted to have.
I paid for my own wedding - a real stretch. My mother, without asking invited a significant amount of extra guests I barely knew from another country. She commanded our attendance at a large gathering the night before the wedding - which we were too tired for, and couldn't afford. She changed our wedding menu, an extra I had to pay for in full on my return from honeymoon - lovely surprise that one. They put vodka shots in my father's drinks, and someone had to take him home early.
The point is, she cared far more about their feelings than she did about ours, or the expense or extra work it caused when I was stretched to the absolute limit. None of these people cared about us and I didn't hear from them again until a funeral 10 years later. So what was it all for?
They are adults, please don't foist extras on them because it will make life easier for you as a peacekeeper.