I've got the same Motorola as Balmerhon(I think). I got it at Smiths for £50 if you bought a book/cd/dvd. My daughter got the same one in the after Christmas sale for about £60 at Carphone Warehouse. So the deals are out there, you just have to look around.
If you want to eventually change to a contract, then I'd pick up a cheap PAYG, which you can get for as little as £10-20. But if you're thinking of sticking with PAYG then I'd get the best phone I could afford.