The larger one.

I like option 1 ...as it does not leave you with such big variables of rug showing around the borders

The larger one. If possible cheat the rug over to the side with the chairs to try and have most on the chairs on the rug. Chairs being partly on the rug can look strange plus, depending on the thickness of the pile, might make the chairs slope back too much.

Wow - such quick responses! Thank you. I am most likely going to get this flatweave rug (photo is the rug in a smaller size but this gives the basic idea) so won't have to worry about sloping, hopefully.

Think pads always add a richness and cushion to area rugs as well...but you need to consult with a good rug dealer as to what will work best with the rug and the flooring beneath it...it is tempting to cut corners on pads but I would invest in the right one for the job...