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O2 CPW customer: can I do this? Please help!

Can't get to sleep so I'm asking for advice :D

I have a current O2 contract with Carphonewarehouse which is up for renewal in about a month. I also have a new Pay & Go O2 SIM card. A few questions:

1. Can I move from Contract to Pay & Go on the same network, and keep my old mobile number?

2. This is the confusing part: CPW say I need to call them and send a cancellation of contract in writing. It takes 30 days. Is that 30 days of receiving my letter or my phone call that they terminate my contract?

3. Which do I request first - cancellation/disconnection of current contract, or my PAC? I'm worried that should something happen I get disconnected before my PAC no. arrives or the transfer isn't possible. I need to keep my old mobile number but my contract is costing me a fortune!

Sorry if I'm asking stupid questions. I did e-mail cwp but their customer service rep didn't really answer my queries, and all the info I'm getting on Porting is about changing your mobile network whereas I want to go from contract to pay&go on the same network which is probably quite unusual! I am going to ring them but the efficiency of their telephone staff is inconsistent to say the least so I want to prepare myself.

Any advice? Thanks
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