I reckon you've got 3 possibilities.
Firstly, the Nikon 70-300mm F4-5.6G AF for £109 or possibly less. The downside is that this will be manual focus on your D40 it's also no good for macro.
You've also got the Sigma 70-300mm F4-5.6 Macro DG at about the same price. This is also manual focus, but has the advantage of a half decent macro mode (ie close focussing)
A worthwhile upgrade is the oft mentioned Sigma 70-300mm F4-5.6 APO Macro DG
for about £150, which is similar, but has better glass. This is the classic budget zoom, mentioned in practically every "what zoom should I buy" thread.
Lastly, if your bonus was a little more generous, take a look at the Nikon 70-300 VR for £337. This is I think the cheapest 300mm lens that will autofocus on the D40, and has the huge advantage of Vibration Reduction.
Here's a recent thread with some 70-300 VR samples...
http://forums.dpreview.com/forums/re...hread=22403935
Personally, I'd go for the Sigma (APO version) if money was tight or I really needed some macro functionality and could live with manual focus.
Given a bigger budget, I'd get the Nikon 70-300VR without a moments hesitation.