I'm sure someone will confirm this but if you have been provided with a service then it is reasonable for the service provider to insist on being paid regardless of whether its their fault or not that the money hasn't been asked for and I'm certain the law is on their side. You will have to pay them the monies owed. I'm unsure about whether they have the right to refuse to terminate the service before being paid though but I'm sure someone on the Forum can advise with that. If you pay them now will they not agree to immediatly terminate the service?
On a personal note I'm with Tiscali and am looking at other providers at the monent partly because of their muck ups with billing. One month they wouldn't charge me and the next month they'd charge me for 2 months. Sometimes they'd take a months fee out then skip a month and do it again. Very annoying I'm sure you'll agree.