LG has upped the stakes in pay-as-you-go market by unveiling the LG-KC550, a prepay-priced phone that boasts a 5 megapixel camera.

The device will cost in the region of £130 on prepay and will be available this month at Phones4U, Carphone Warehouse and Tesco.

The handset's camera comes complete with Schneider-Kreuznach certified lens, image stabiliser and a dedicated camera button to capture images quickly and easily.

The KC550's TV output and 30 frames per second (fps) ability allows users to enjoy DVD quality movies on a large screen, along with photos and documents.

The device also has a Nintendo Wii-style gaming system, with a motion sensor embedded in the handset.

Users can play a host of motion controlled titles by plugging the handset into their TV and tilting or rotating the virtual motion controlled gaming function, called ‘M-Toy'.