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The company's website had the devices priced at £299 for the 8GB model and £350 for the 16GB version, before the details were hastily withdrawn.

An O2 spokesperson told PC Pro the prices were put up in error, adding "they're possible, but not confirmed." Which hardly ranks as a denial.

Considering the original iPhone was £269 with a £35 per month contract, the pay-as-you-go prices are hardly extortionate.

And considering that the cheapest iPhone 3G contract will cost £30 per month, with a £99 up front fee for the handset, many may consider it a price worth paying to be free of the contract handcuffs.

O2 will also throw in six months' free "unlimited" web browsing (subject to the usual fair usage agreement) with the PAYG handsets, although customers will have to pay £10 per month thereafter.