£150 is a tight budget.
I'd say get a decent headunit with preouts (+ anything else like ipod connection or cd changer) for future expansion.
the HU could cost anything up to £100 or even more but is well worth it.
then replace current speakers but i don't know if you'll get anything decent within your current budget. you'll have to check speaker sizes, mounting depths etc. as i'm not familiar with the mk1.
then in the future you can consider subs, amps etc. which is why its worth getting a HU with preouts etc.