Witholding the payment is not a good idea. By law, they have to mark it on your credit file.
I understand you are frustrated, but you need follow the complaints procedure.
If O2 haven't replied to you eight weeks after the first complaint, you can go to the ombudsman.
www.otelo.org.ukHave you checked your junk mail folder? Have you followed the advice in the auto-acknowledgements? Have you written to the Complaint Review Service?