Greece debt: FTSE 100 slides as worries over Greece persist
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(Close): Shares in London and across Europe have continued to fall, with Greece expected to fail to make a payment to the IMF.
Greece's bailout deal ends on Tuesday, as it faces a deadline to repay a €1.6bn (£1.1bn) loan to the IMF.
The FTSE 100 closed down 99.5 points, or 1.5%, at 6,520.98.
Shares had rallied on reports of talks taking place over whether Greece could accept an offer by creditors allowing it to repay part of its debt.
Greek media said one of Greece's creditors made a last-minute proposal of reforms on Monday.
The news briefly pushed the German and French stock markets into positive territory. However, the rally was short-lived.
On the currency markets, the euro fell 0.8% against the dollar to $1.1148. The euro had fallen to a four-week low of $1.0955 on Monday before recovering to above the $1.12 mark.
Among individual shares on the London market, the supermarket sector came under focus following the latest survey of the sector.
Shares in Ocado gained 3.7% following the online grocer's latest results.
Ocado reported pre-tax profits of £7.2m for the half-year to 17 May, down slightly from £7.5m a year earlier, with gross sales up 15.7% to £511.9m.
The company also said it hoped to sign a deal to sell its technology to overseas retailers by the end of the year.