I can only guess at your daughters age, but at some point she'll go online - either at your nicely protected home network or indeed at her school or friends rubbishly protected network. The issue with Windows XP past April 2014 is that any serious security problems will be NEVERDAY (a cute phrase that sounds like 0-day) where security issues will never be fixed. It won't take long to browse through the flash games site before a browser injected malware will find its way on to the machine.
The problem with techies is that we think too much about the network, the AV, the machine - but less about the user and how they will use the machine in a way that we couldn't possibly predict. So the real ecomonic argument is not about GBP300 for a netbook, but the opportunity cost of the stress and hassle when your daughter loses all of her homework, photos etc because some cryptolocker malware wants 1bn Bitcoin (market rates will go down as well as up) in order to unlock the data.
if it were me, I'd factor in a replacement at her next birthday.