I would use a set of passive rollers to measure how much has been pulled out, with a separate set of drive rollers pulling the cable through the passive measuring rollers.
Do you really mean that you need better than 1% accuracy at 50mm? So 50.5mm or 49.5mm would not be close enough? If possible for small size we require more accurate but for the size 10 mtr to 20 mtr 1% accuracy is perfect. If possible ......otherwise we work for 1%accuracy for all.