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If SHE wants to invite all those extra people (beyond what YOU can afford and what you are OK asking your parents for money) his family should pony up. That being said, if you're inviting great aunts and the whole barnyard of folks, you may have to put a cut off on extended family.
Keep the guest list small like you and your FI want. I'd let them invite more if they contributed though. Her guests, her money. You can't afford it, plain and simple, and I don't think your parents shoudl take on the burden of a ridiculous excess of your FI's family.
My family has 5 people coming. yes, 5 family memebers. My FMIL handed me a list of 85. Well, my parents are not paying for that wedding 
...needles to say, my FI and I are, but that is our choice and we CAN afford it. If we coudln't, we'd be scaling back considerably. Ther'es no shame in it but stnad up for what you two want.
my family is 10 people, my FI's mothers guestlist was 200 people and counting
i told her i couldnt afford the wedding she wanted but she was more than welcomed to pay for her people and i gave her a per person value and she shut up
we're now eloping - it got too all too hard for this frazzled bride
LoL, yeah, see how important those people are when she finds out their dinner is $89 a plate or whatever. Then, i doubt they're *that* important....
*lol* @eloping - good for you!
I'd do the same... FI and I set out our budget, and made our guestlist accordingly. We made it clear that's what we're comfortable with and able to afford. We may have some wiggle room once RSVPs come in, but until then - nope!
If you're willing to have all of this extra family attend, FMIL should definitely be contributing financially. And giving her a cost per person is a great way to handle it! Don't forget to factor in paper goods, favors, etc. - not just food & drink!
i had this same augument when planning my wedding. MIL had all these guests she wanted to invite...but husband and I were footing the entire bill. I told her how much $$ she would need to contribute and, i promise, she never called again with requests. planning was smooth sailing (OK, not completely, but you get my drift) once I made it clear who was in charge...
I don't think there is anything wrong with asking her to help out if she can. I'd say that you'd love to have them attend but you just can't afford it...then she'll have an option of offering to help
dress3.jpg (42 KB, 55 downloads) 1 year old dress.jpg (35.6 KB, 39 downloads) 1 year old 
Welcome to my world! That same thing happened with us. I gave them a cutoff in terms of relations who they could invite and also a set number. They aren't contributing a dime towards my wedding, so they shouldn't be inviting 4rth cousin Sally and all 12 of their children.
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My FI family wants to invite all of their extended family (like great uncles and aunts and all of their children and grandchildren totally to around 50-75 people) but I am only willing to ask for so much money from my parents. My FI and I are planning on contributing to what my parent's offer but with this invite addition my budget is shot.
Should I stand my ground and keep the guest list at the 100 family members and few friends I had planned for? Or allow them to invite the additional people (who I like and would love to have attend) but make it clear that they must then contribute the additional money?
Thanks for any advice!