What was the reason for the delay? If there are no ExtCircs, I would insist for the €250.
Incidentally, I would not go by the price at which they sell avios to determine their value. As a rough rule of thumb, I would value avios at about £.0.01/avios, and therefore 5000 avios at somewhere in the region of £50. What they have offered you has a value of less than a quarter of what they should pay you if there are no ExtCircs (and moreover it is not cash, therefore less liquid).