Regarding my previous post, reporting unauthorised payments to O2 taken from my bank account, I contacted a an extremely helpful representative from O2 and was able to resolve the issue.
Apparently, when I cancelled the Virgin Mobile phone, the Virgin representative that I spoke to by telephone didn't cancel the contract right away, but created an O2 account for me, which I wasn't aware of.
The contract was cancelled the following week. The £10.00 charge was a standard connection charge and the £153.36 was an early cancellation charge.
The excellent O2 rep saw that this was a mistake because the contract had been cancelled within 14 days. She arranged for the money to be refunded to my bank account. This will take 7 days to reach my account.
I can't praise the lady from O2 highly enough, because she understood the issue and got it resolved in less than an hour.
I recommend that if anyone has any issues with O2, go to O2 Live Chat to get them resolved.