I believe you can reduce the wire size to that of the "Service". A 400A meter base does not imply a 400A service. If you need a service larger than 200A and less than 400A, you'll be using a 400A meter base. But if 250A is the rating of the single disconnect, or the calculated load comes to 250A for a multi disconnect service, then you can use wire sized for 250A.
All that being said, if I was installing a 400A meterbase, I'd probably make the service 400A also because some will assume it is capable of 400A. Or if you were contracted to install a 400A service, then I think you're stuck with installing wiring capable of that.