In a move that no-one saw coming with the talk of Vodafone and T-Mobile's frenzied attempts to clinch the iPhone deal for Europe, The Times is reporting that O2 has beaten its rivals to win the exclusive rights to offer Apple’s iPhone in the UK.

Grabbing the rights to sell the iPhone exclusively in the UK from under the noses of larger operators will be a major coup for O2.

The iPhone is due to go on sale in the UK towards the end of the year, certainly in time for Christmas, and will give O2 a massive competitve edge over the UK's other mobile phone operators.

The UK price for the device is said to be around £300, although it is not specified if this is for the 4GB or 8GB versions.

The Times, and The Finacial Times both report that the final contract is expected to be signed imminently, and presumably an official statement due soon after.

Negotiations are apparently continuing with mobile phone retailers including, as we've previously reported, the Carphone Warehouse who will be able to sell the iPhone after O2's exclusivity period ends.

For the last week or so rumours have been rife about which mobile phone operator Apple would give the iPhone contract to in Europe.

A German daily newspaper, the Rheinische Post, reported yesterday that T-Mobile had nabbed the deal for Germany and would be selling the iPhone in November.

This is still unconfirmed, and now Orange are being touted as the likely French carrier.

It seems Apple have abandoned the plan of one Europe-wide carrier, instead opting for the operator that offers the best deal (whether that's for Apple or consumers is yet to be seen) in each country.

Although Apple's demands are said to be high, regarding control and financial details, it appears that the major mobile operators were desperate to get the European rights to the iPhone and a bidding war was started.

The Times suggest that Apple’s agreement with O2 is will include a continuing share of the revenues generated by each iPhone customer, which is similar to the AT&T deal in the States.

Apple's iPhone went on sale in America on Friday 29 June amid unprecedented levels of hype and is said to have sold 700,000 units already, a figure that smashed records for the previous fastest selling mobile phone, Motorola's RAZR.

Europeans hoping to own an iPhone will be disappointed that the rumour of 3G connectivity have not been proved true.

The phone has come in for much criticism in the states for the slow speeds users experience when browsing on the EDGE network.