I am upgrading from a 100 to 200 amp service and will be upgrading my sec cable to a 2/0 or 3/0 thhn. Ive been told that nec permits downsizing of the neutral wire. Is this true and if so what size is acceptable?

If calculated, the neutral can be no smaller than 70% of the rating of the circuit.

For the live conductors, #2/0 copper and # 4/0 aluminum is allowed for 200 Amp.

SEC Cable has a full size neutral.