No sorry I do NOT think that is an acceptable explanation. For all intents and purposes from the information available from WHOIS and ebay their is at the VERY LEAST a conflict of interest and a clear appearance of a connivance to increase the sale price.
Lets look at the facts as they appear from WHOIS.
1. The domain POP.co.uk is owned by uwant.co.uk Limited
address;Daisy Hill Farm
Holton le Moor
Market Rasen
Lincoln
LN7 6HN
GB
2. The highest bidder at the moment is
prepaycouk which if you look up on
WHOIS shows as being owned by
uwant.co.uk Limited of
Daisy Hill Farm
Holton Le Moor
Martket Rasen
Lincoln
LN7 6HN
GB
3. uwant.co.uk is registered to "dean" at the above
address
You now state
"I currently own PrePay.co.uk which is also forsale".
In fact prepay is, apparently, owned by unwant.co.uk limited.
You then state;
"prepaycouk was regisitered by a friend of mine"
But the WHOIS states clearly it is owned by uwant.co.uk Limited.
I think it would be fair that you withdraw the highest bid at present but that is between you and ebay.
Inshallah