i wish to run a web site selling the product using text and a premium
phone line for payment ie someone will text 'Code 123' to 60998 and it
will charge them £3 pounds and on the phone line you will call and
type the number in and the code will be read out after wards . how do
i set this up?pleae explain how it works and any good companys to use?
greatly appreciated

You need to approach a service aggregator - preferrably one that
offers both SMS and premium IVR (Interactive Voice Response) so that
you can minimise the number of suppliers.

In the premium SMS market, the largest UK players are mBlox, Opera
Telecom, MX Telecom, WIN and 2ergo.  Of those, the only provider which
also offers premium IVR is Opera Telecom (www.operatelecom.com) -
typically you can expect about £1.85 to be paid out from a £3 end
customer price point.  The retained revenue consists, approximately,
of £0.45 VAT, £0.55 to the mobile operator (eg. Vodafone) and £0.10 to
the SMS aggregator (eg. Opera Telecom).

You can either elect to purchase a dedicated short code (eg. 88888)
for approximately £800 across all UK mobile networks or take a shared
short code with your own keyword for about half as much.  An
interesting provider worth looking at is bango.net - they offer an
off-the-shelf ready-to-go self-provisioning solution, though they
retain a significant % of the revenue as a result.  Bango provides an
application platform rather than pure connectivity into the mobile
networks - which you will need.  MX, Opera, WIN and 2ergo also do this
(though not quite as intuitively), though mBlox does not.

Also note:

- premium rate phone lines are not accessible by the majority of
mobile phone users; this is changing with the launch of 5-digit voice
short-codes on mobile networks (eg. dial 88888).

- until very recently premium rate SMS has only been allowed for the
payment of services consumed on the mobile device (eg. not physical
products); this has, however changed.