You should keep him in the smaller crate but take him out more often. Don't expect him to hold it for more hours than he is months old. Does that make sense? If he's 3 months, don't make him hold it for more than 3 hours. If you keep him in the small crate and take him out more often, he shouldn't wet in his crate. Putting him in the large crate will encourage him to use the potty.
Actually, a dog should be able to hold it one hour more than he is months old. Since your puppy is 2.5 months old, he should be able to hold it for 3 hours, no problem. But do not leave him in there any longer and expect him to hold it. Nor get mad at him if he has an accident. Also, NEVER, EVER clean up a mess your dog has made, in front of the dog. Remove the dog from the room and then clean up the mess. You don't want to bring attention to it. Puppies learn a lot from observation.
Keep him in a small crate because dogs HATE to make a mess where they sleep. They will mess their crate if it is big enough to escape the mess (i.e., bed on one side, newspaper on the other. The crate should be big enough for the dog to stand up and turn around, but THAT'S IT! Don't put super absorbant pillows or blankets in the crate. If the puppy has a mess and feels it, he will try and hold it a little longer next time around to avoid that same experience.
Is there anyone who can let your puppy outside every 3-4 hrs?