Global markets fell sharply today as fears of a Greek default punctured optimism at the end of a record-breaking week for the FTSE 100 Index.
Greece's officials were due to meet creditors on Saturday to thrash out a deal, but many commentators believe Athens will struggle to make a payment to the International Monetary Fund due next month.
The uncertainty caused the FTSE 100 Index to fall away from a record intra-day high set in the previous session, with the top flight down by 65.8 points at 6994.6.
The break with the 7000 mark came despite expectations that China will announce further stimulus measures after figures this week showed that the country grew at the slowest pace since 2009 during the first quarter.
The pound was stronger as it was revealed that unemployment continued to fall in the quarter to February, with a record 31 million people now in work and the jobless total down by 76,000 to 1.84 million - the lowest for seven years.
There was less positive news in terms of wage growth, which slowed for the second month in a row and undermined hopes for an acceleration in pay rises this year.
However, sterling was up against the US dollar, at 1.49, and a cent higher against the euro, at 1.39.
Rolls-Royce shares were in demand after it announced an order worth £6.1 billion to provide Trent engines to Dubai-based airline Emirates for 50 Airbus A380 super jumbos.
Rolls has a long association with Emirates and shares rose by as much as 2% before slipping back to close 1.5p lower at 978.5p amid the lacklustre performance of the London market.
Tesco shares were 1.8% lower - off 4.4p to 236.7p - as investors geared up for a sharp fall in annual profits when the grocer presents results on Wednesday.
Underlying profits are likely to be down 65% to £1.07 billion after a series of profit warnings, an accounting scandal and the loss of sales and market share to rivals such as Aldi and Lidl.
At the bottom-line, Tesco is expected to report a big loss due to a one-off hit of up to £3 billion on the diminished value of the company's property estate.
Royal Mail shares were almost 1% lower after Davy Stockbrokers started coverage of the stock with an underperform rating and warned that pricing pressures in the parcels sector continued to impact on the company's prospects.
Shares were 3.5p lower at 445.6p after Davy set a price of target of 380p.
The biggest risers in the FTSE 100 Index were BP up 5.9p at 479.4p, Severn Trent up 13p at 2134p, Sky up 5p at 1052p and Whitbread up 15p at 5240p.
The biggest fallers in the FTSE 100 Index were St James's Place down 31p at 927.5p, Anglo American down 28.5p at 1010.5p, GKN down 9.3p at 361.3p and Schroders down 83p at 3259p.
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