Right..
Paypal may reverse the payment to your account, your Paypal account wont be closed and it will go into a negative balance. They will contact you asking for you to clear the negative balance.
Now at this point you have 2 choices..
a) Pay the balance and be done with it.
b) Ignore them.
If you take option b), they will pass the debt to the courts, they will go for a CCJ and then employ a bailif to come to your house and take your stuff.
Probably by the time it gets to this point, it will be 6-7months on and the charge will have gone from £200 up to about £330 etc.
Its your life, its up to you.
Or you can ring them now, and ask them what you can do. But the truth is that you have been scammed and there is nothing you can do about it.
What was the postal address? Did it look dodgy, how about the emails.