Updated at 13.00: The FTSE 100 was 1.8% lower on Monday after poor German manufacturing data drove down indices across Europe.
The UK's leading index was down 106 points at 5,666 by early afternoon, while France's Cac 40 was 2.3% lower at 3,115.
In Germany, where a key manufacturing index fell to its lowest level July 2009, the Dax was down 2.4% at 6,588.
Sentiment was also hit by the Bank of Spain's announcement the country was in recession after Q1 GDP fell 0.4% as well as the collapse of the Dutch coalition government over the weekend.
FTSE miners were hit after Chinese manufacturing data suggested the industry was still contracting in April - albeit at a slower rate than in March. Vedanta Reources fell 4.5% to £11.81, with Rio Tinto down 3.5% at £34.23.
The sole pair of risers were BSkyB (up 1%) and Vodafone (up 0.3%) having announced it is to acquire Cable & Wireless Worldwide for £1bn.
Spanish 10-year bond yields rose back above the 6% level, with Italian, Portuguese and Dutch benchmark rates also ticking up as bunds, treasuries and gilts made slight gains.
Elsewhere gold dropped to $1,632 per ounce, while sterling maintained a near-20 month low against the euro, the single currency trading at 81.71p.
But the pound did retreat from the five month highs seen against the dollar last week, trading at $1.6083 by mid morning.
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