snab , have you checked the average price difference between a 2GB & 4GB model? If it is about £8, then probably you have no choice but to accept it.
However, if it is way much more, like £20-30 difference, i suggest you contact the seller and tell them £8 is not enough. If they refuse, probably you can escalate the claim and let PayPal investigate and settle the matter fairly.
You may want to take a look at the PayPal Buyer Complaint Process
Here.
Good Luck.