Just coming to the end of my contract and phoned O2 to see what they could offer me.
Deal is as state above...
£27 monthly (24 months) cost + £39 upfront fee for 500 minutes, unlimited texts and 500mb data. No other company even comes close to this and I even phoned Vodafone and Carphone to see if they could match (which they couldn't).
Obviously this is a retention offer so not sure if O2 would offer this to a non-customer but it might be worth a go.
It's a pricey phone anyway but if you want it, O2 certainly are offering a very good deal.