The price of Apple's 8GB iPhone is to be slashed to just £169, in a special offer that lasts from tomorrow until June 1st.

O2, the mobile network which exclusively provides contracts for the iPhone, has cut the price by £100, from £269.

The deal includes a choice of different contracts starting at £35 per month, and you will need to sign up to an 18-month contract. Those who take up the new deal will also be given free access to all 7,500 of The Cloud's Wi-Fi hotspots in the UK.

The price of the 16GB iPhone will remain the same at £329 inc VAT.

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