malia is ok. I went there in 2003. Good if you just want to get trashed but its not really the real side of crete.
Drinks and stuff there aren't too cheap, about €3-5 a beer. If I remember correctly it was €5 for a JD and coke which was more JD than coke and pretty damn lethal.
I'd take £500, activities in the day/presents for people/food/drink all adds up to a fairly large amount. Sure you might not spend it but its probably better to ensure that the money is there if you need to spend it than not having enough.