Ok i have just phoned o2 customer services and this is how it went:
Me: will the iphone 3g pay as you go be available to buy in the 11th
o2: yes it will be in all stores.
Me:

... are you 100% positive?
o2: yes, i have the information in front of me here. The pay and go iphone from o2 will be available for all customers on the 11th july 2008.
Me: are you sure it isnt just the contract option that will be available because the website says PAYG will be coming later in the year?
o2: it is definatly being released on the 11th july 2008.
Me: i have had o2 stores tell me it will not be available for PAYG on that date.
o2: no, i have the information and i can confirm that the PAYG iPhone 3G will be available on the 11th July 2008.
well there you go, i couldnt believe it.