My mobile phone was stolen and the phone company says I am liable for the 700 pound bill.

I discovered my mobile phone had been stolen after it had been missing for just over a week. During this time I thought the phone had been misplaced, probably left at a friends house who was then away for a couple of days and unable to check for me. Also, I was ill in hospital and unable to look for it elsewhere. As soon as I was well I retraced my steps to find the phone but to no avail. A friend called the phone for me and heard a foreign ring tone and a man answered but quickly hung up. I immediately called the phone company to report it stolen. They verified that the phone had been taken abroad, and been used to run up a bill of approx 700 pounds. They say I am liable for this because I did not report the phone missing within 48 hours, even though I can prove I was ill during this time, and was obviously not abroad to make these calls myself. I do not have this sort of cash, and also feel the phone company had a responsibility to contact the phone to question the unusual activity