FTSE100 closed 72 points lower at 6,968 as traders took flight over mixed concerns, including Greece's continued debt woes.
Talks on a possible third bailout can only restart if “substantial” differences between Greece and its creditors are resolved, European Union economics commissioner Pierre Moscovici said today.
David Madden, at IG, said: "Traders know deep down that a deal will be reached in the nick of time, but those who don’t have the stomach for it are getting out of the market while they can. Greece has been in revolving door crisis talks for five years now, and Yanis Varoufakis is refusing to bow down to the international creditors."
Primark owner Associated British Foods (LON:ABF) was one of the top risers after heavyweight broker Goldman Sachs released a bullish statement on the company.
It is taking its Primark brand to the states with a September launch of a new store in Boston which Goldman says could be worth £720mln to its earnings by 2020.
Meanwhile, it was a mixed bag for miners as some were hit by panic selling in the Chinese markets.China stocks continued to be sold off overnight - falling as much as 3.5 per cent after plunging 7 per cent a day earlier.
Anglo American (LON:AAL), heavily influenced by Chinese data, saw shares slip 0.43%.
In small caps, Minco (LON:MIO) was the big riser after it swung to a profit in the first half of the year. Shares soared almost 31% to 1.80p.
A foreign exchange gain of US$665,000 helped the company record a profit of US$482,000 compared to a loss of US$271,000 for the same period in 2014.
Data centre company Telecity (LON:TCY) eased 1.10% as it revealed it is heading to Silicon Valley instead of Amsterdam after it agreed to be taken over by US rival Equinix for £2.35bn.
The California–based company has seemingly won over the Telecity board, which had previously been in favour of a £3bn all-share merger with Dutch firm Interxion.
Telecity's board is recommending acceptance of a 572.5p cash plus shares offer worth around 1,145p per share.
Other small caps in focus were Amur Minerals (LON:AMUR) up 13.7% to 20.75p and ferrex (LON:FRX), which gained 13.04% to 0.65p.