UPDATE: The rumours have been The confirmed today by O2. The 8GB iPhone sells for just £169 in 02 stores while Apple still sells it at the original price of £269 on its own stores.

O2 and Carphone who distribute the iPhone in the U.K. may announce major price cut in the 8GB model tomorrow if a report on the Internet is to be believed.

According to the British mobile-centric online publication MobileToday, the 8GB iPhone model, which currently sells for £269 ($530.5) will see a £100 ($197) price cut bringing it to £169 ($333.5). It however appears that it will be a limited time offer which will expire on June the 1st.

The 16GB model will remain at its original price of £329 ($649), the report adds.

02 has already changed its offering in the U.K. by providing more attractive plans for the same pricing. The move boosted iPhone sales during the first calendar quarter of 2008, according to 02.

T-Mobile has also recently announced it is subsidizing the price of the iPhone when sold with its subscription plans, making the iPhone available in Germany for as little as 99€ ($156.5) with the most expensive plan.