Greek debt woes and fears over the global economy hit heavyweight stocks in the banking and oil sectors amid a worldwide market sell-off.
Barclays and Royal Bank of Scotland both lost more than 4 per cent, down 9.8p to 212.2p and 15.6p at 342.2p respectively.
A political crisis in bailed-out Greece and gloom over the outlook for the US deepened anxiety over the world economy meant the FTSE 100 Index suffered its worst fall in about 15 months. It plunged 2.8 per cent, or 181.04 points to close at 6,211.64.
At the same time oil prices showed no sign of firming, with Brent crude down to $85 a barrel. BP was down 10p to 416.7p, and Royal Dutch Shell off 58p at 2,198.5p.
Tony Cross, market analyst at Trustnet Direct, said: “International Airline Group is another big faller – Tuesday’s rally always did look precarious and with uncertainty over the eurozone economy building, it’s no surprise that the gains have been so short lived.”
The British Airways owner was down 11.5p at 328.1p despite being a beneficiary of lower oil prices.
But the lower price of crude probably helped cushion declines for some travel stocks, in a session which also featured heightened fears over the spread of Ebola. EasyJet was 10p lower at 1,352p and cruise ship operator Carnival fell 14p to 2,199p, though falls were worse for Tui Travel, off 7.1p at 330.5p.
Meanwhile the healthcare sector was shaken by the potential collapse of a £32 billion takeover of Shire by rival AbbVie. Shares in Shire lost almost 21.5 per cent of their value as they plunged 1,107p to 4,033p. AstraZeneca shed 142p to 4,264.5p on fears that the US tax crackdown would deter Pfizer from a second takeover tilt at the UK firm. Smith & Nephew, another persistent takeover target in the sector, fell 5 per cent, or 52.5p, to 921.5p.