PAYE workers pay up to 7.5% PRSI, including the levies, so I'm not sure about that.
But either way it's irrelevant as you have to pay the 5% PRSI on your self-employed income, you don't have a choice about this. It's true, you don't get much benefit from it - it entitles you to contributory old age pension, bereavement benefit, and maternity leave benefits, I believe - but there's nothing much you can do about this either.
By the way, the reason you were made an employee is probably because the revenue takes a dim view of companies engaging de-facto full-time employees as contractors. This has been rectified by the company, but you're still going to have to make a tax return for the year as you had non-PAYE income. You can pay your PRSI and income tax on the non-PAYE income when you make this return, on or before Oct. 31 2007 for income in the year 2006.
If in doubt, or if you're intimidated by tax returns, or if you don't know how to compute your correct tax bill by claiming all business related expenses and entitlements, engage an accountant to do this for you.