It all depends on how small you want the speakers to be. With that budget, I'd be basing everything around a Yamaha DSPZ7. You could look at Monitor Audio's Apex package, which are small, high quality satellite style speakers. This will leav you around £1k to get a good quality Bluray player and all necessary cabling/stands.
Alternatively you could look at KEF's KHT6000ace package, which is also a lifestyle based package, and like the Apex, won't take up too much room.