Greece’s failure to reach a concrete deal with creditors to avoid a default depressed world markets today.
Private lenders are understood to have agreed to write-off half the country’s debt in a tentative agreement, but this could still fall apart and fears remain that Greece could yet need a further bailout.
The FTSE 100 Index fell 1%, or 62.4 points to 5,671.1, with banks suffering amid the eurozone fears.
Barclays and Lloyds Banking Group both lost 4% of their value, down 9.3p to 213.6p and 1.3p to 31.1p respectively.
Royal Bank of Scotland was 1p lower at 26.8p after a weekend of turmoil that eventually saw chief executive Stephen Hester give up his £1million shares bonus.
In a quiet session for corporate news, Hovis and Mr Kipling owner Premier Foods enjoyed a 10% surge after announcing plans for a major television advertising push. Shares rose 1p to 11p.
Meanwhile, Cranswick, which supplies sausages and bacon to supermarkets, saw its shares rise 1% after reporting a 10% sales jump as its pork products featured on more dinner tables over Christmas. Shares were up 11p to 770p as analysts nudged higher their profits forecasts.
The biggest Footsie risers were AstraZeneca up 19p at £30.55, International Power ahead 2p at 332p, Polymetal International up 6p at £11.31, and GlaxoSmithKline ahead 7p at 1,427.5p.
The biggest Footsie fallers included Essar Energy down 7.6p at 126.8p and Vedanta Resources down 50p at £11.76.
Stuart Lamont, of investment manager and financial planning specialist Brewin Dolphin in Aberdeen, noted Plexus Holdings up 5.3% to 103.5p and Xcite Energy which closed 0.26% higher at 97.125p.
Among the fallers, Aberdeen Asset Management lost 3.7% to 233p while EnQuest edged 2.2% lower to finish at 106.2p.