Save some money on the PSU and get this XFX Core 550W for 50quid/free shipping. Sink the extra cash into upgrading the GPU...an HD6950 or 560ti should fit in the budget with this change. That PSU is more than enough for the either of the card upgrades I mentioned.
The i3-2120 is also an excellent suggestion and that would allow an even beefier GPU than I suggested. I have a 2120 paired with an HD 6950 and I'm not bottlenecked.
Which is exactly why I recommended it
I understand for some games an i5 may be the better choice (BF3 Multiplayer for example) but from what I understand, you'll still be achieving playable frame rates anyway, so it's not a very big compromise.
Can anyone suggest a good website in the UK the buy the components suggested? I was going to be buying from dino PC but now it seems as if ill be making it myself, i just need a good site to buy parts.