After a lot of googling debugging and struggling I have found how to connect to Internet through H3G UMTS using LG U310 handset (I think it could be the same for U300 too).

The first you need to check, is the phone settings for DUN, in the phone menu go to Connectivity->3.Dial-up network->2.Bluetooth should be checked.
I am not sure, but may be you need to change also the data port, on the idle screen type 566366#*# and you are in the technical menu, go to 3.Port Settings->2.Data Setting and make sure 2.BT set for Data is selected.

Make sure the phone has no applications in background (press and hold Menu button to pop-up the “task-bar”) or you will have some cryptic errors about phone is busy.

Now, as soon as you get the phone with idle screen – pair it:

`hcitool scan` - should discover your handset and show its "MAC"
`hcitool cc "MAC"` - does some connection stuff
`hcitool auth "MAC"` - authenticates

a window with PIN request on both PC and handset may pop-up at this point or the next one

Now connect to the PPP channel (channel 8 is PPP):

`rfcomm  connect rfcomm "MAC" 8` - should give you:
Connected /dev/rfcomm0 to "MAC" on channel 8
Press CTRL-C for hangup

Now to the hard point, PPPD:
This is my peer file /etc/ppp/peers/u300:

debug
noauth
#may be commented out if you want PPPD to configure the default gateway
defaultroute
usepeerdns
ipcp-accept-remote
ipcp-accept-local
460800
crtscts
connect "/usr/sbin/chat -v -f /etc/chatscripts/tre"
/dev/rfcomm0 115200
noccp
novj
lcp-echo-interval 0
lcp-echo-failure 0
921600
noipdefault

and the magic chatscript /etc/chatscripts/tre:

ABORT BUSY
ABORT 'NO CARRIER'
ABORT ERROR
REPORT CONNECT
TIMEOUT 10
"" rAT
OK ATE1
OK 'AT+IPR=115200'
OK 'AT+CGDCONT=1,"IP","","",0,0'
OK ATD*99#
TIMEOUT 22
CONNECT ""

when you’ve got your files in place lauch pppd:

pppd file /etc/ppp/peers/u300

and watch the log….

hopefully you’ll get something like: log file

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