Buildings of that age wouldn't normally need a rewire. Rewiring is particularly required on old properties with rubber cable coverings that rot after a while. You will have PVC.
Since your meter position is unchanged and not actually in your property, I don't really understand why they are trying to change the wiring of the main protective earth at all. The wiring point of this earth is at this meter, and it should run to the water supply pipe for the building. Strikes me it should not have needed touching.
If in the course of the water work they have discovered a fault with the earthing, it is fair enough it point it out to you, but a �3500 solution to this sounds horrendous.
This is sounding more and more a variant of the old trick of offering to put right a loose tile on the roof, then recommending a brand new roof covering.
Perhaps MANWEB will come and test your earth supply for free - I'm not sure. These chaps don't sound like they can be trusted to give balanced advice.