On Monday, UK wireless carrier O2 announced the official pricing for the unsubsidized iPhone 3G handsets via 02's "Pay & Go" prepaid service. The prices are much higher than the devices on contract and will retail at £350 (US$631) for an 8GB iPhone 3G and £400 (US$721) for the 16GB version.

According to AppleInsider, the service itself dropsthe regular monthly subscription fees but provides assorted benefits depending on how much money is deposited into the account each month. Paying between £10 and £14 (US$18 to US$25) each month nets a bonus 500 minutes of call time to any UK home phone or O2 cellphone; paying between £15 and £29 adds 1,000 minutes under the same terms, while £30 or more provides unlimited calls.

The program currently allows for unlimited Internet access within the UK, including 3G and O2's Wi-Fi network, for a year. After the initial year expires, O2 will then charge £10 per month afterwards. Text messages aren't included with the plan, however, and cost 10p each inside the UK. Calls past the prepaid amount cost 5p per minute.

O2 has also cautioned potential customers that the iPhone's Visual Voicemail and on-the-fly call merging won't be available via the "Pay & Go" plan.

Prepaid phones will be available on September 16th from both O2 itself as well as Apple retail stores and Carphone Warehouse.

If you've used O2 in the UK before or have anything to add from your end, let us know over in the comments or forums.