OK, so I'm taking a risk 'cos it's cashback deal, but I've used mobiles.co.uk successfully before (and they're part of Carphone Warehouse so hopefully won't go bust!). Claims can be submitted online (so no need to post them recorded delivery)
I've been promising my daughter I'd switch her phone to a contract before she starts secondary school (and bankrupts me with texting). The phone's nothing to shout about (but she already has a decent phone so I only plan to use the sim) but this gives her unlimited texts and data for Facebook, etc. and Orange have decent coverage where we are. In fact I'm jealous because I took out a similar deal on Vodafone 6 months ago but with fewer texts and Vodafone's 3G network is pretty poor round our way.
Price works out at about £1/month over 2 years (assuming you claim successfully) and there's a possible £50 Quidco (it's always tracked for me in the past) meaning they're paying you about £1/month.
The same phone was previously posted on PAYG for 90p: http://www.hotukdeals.com/deals/lg-gb102-mobile-phone-unlocked-payg/735231
EDIT Thanks to rugman for spotting; Samsung Tocco Lite also on the same tariff or Samsung Monte for an extra £50 (21 months free instead of 23):http://www.mobiles.co.uk/best-deals.html