Network connection problems iPhone 3G

For 24 hours now I have been unable to use any apps that need an internet connection i.e. Sky News, Telegraph, Apps Store etc. My connection to email and calender is very hit and miss often failing to connect. Picture messaging is also not working and not sending/receiving. Text messaging works normally.
I always have a good signal generally with 3g connection. My wifes iPhone in the same room works perfectly so I cannot imagine it been a signal problem.
Generally what I get is an error message saying network conection failed.
So far I have tried the following
1) Hard reset
2) Switching to airplane mode the switching on again
3) Restoring the phone to factory settings then resyncing the phone
4) Resetting network settings in the settings menus
02 are unable to offer any help beyond the above, and apple wont help due to the phone been out of warrenty.
My phone is a 3g, on O2, not jailbroken, using Microsoft Exchange for email, calender, and contacts.
iPhone iPhone OS 3.1.2