Global markets were on the back foot as they took their first chance to react to US President Trump's failure to scrap Obamacare.
The FTSE 100 Index fell 62 points to 7275 in afternoon trading, after Trump pulled his own healthcare replacement healthcare plans late on Friday due to a lack of support in Congress. The FTSE 250 Index was 76.8 points lower at 18903.6.
Germany's DAX was almost 1% lower, while the Cac 40 in France was around 0.5% down.
The failure has shaken the faith of investors in Trump's ability to deliver on his promises of deep tax cuts and a $1trn infrastructure spending programme, which have buoyed markets for months.
IG market analyst Joshua Mahony said: "The problem for markets is two-fold, with the inability to pass the healthcare reforms meaning any tax cuts will be diminished, while markets are now left wondering whether the President's lack of support in Congress will make his tax cuts hard to pass in any form."
In London, BT was hit with a £42m fine from telecoms regulator Ofcom and will also pay £300m to corporate customers for delays in installing high-speed lines.
It found BT's Openreach division had cut compensation payments to telecoms providers for delays in installing the lines between early 2013 and late 2014.
Ofcom said the fine was the largest it had ever handed down, as BT's shares fell 1%, or 3.4p to 322.3p.
The biggest afternoon risers in the FTSE 100 Index were Next (+72p to 4202p), Marks & Spencer (+5.5p to 337.4p), Randgold Resources (+95p to 7255p), Centrica (+2p to 218.3p) and Associated British Foods (+20p to 2650p).
The biggest afternoon fallers in the FTSE 100 Index were Glencore (-12.1p to 307.7p), Babcock International (-33.5p to 883p), BHP Billiton (-45.5p to 1199.5p), Antofagasta (-30p to 800.5p) and International Airlines Group (-18p to 531.5p).
The biggest afternoon risers in the FTSE 250 Index were Inchcape (+37p to842p), FirstGroup (+3.7p to127.8p), Essentra (+9.5p to518p), Millennium & Copthorne Hotels (+7.5p to449p) and TalkTalk Telecom (+2.8p to183.5p).
The biggest afternoon fallers in the FTSE 250 Index were Kaz Minerals (-27.4p to 444.6p), Ferrexpo (-6.5p to 161.5p), Vedanta Resources (-30.50p to 779p), Hunting (-19.5p to 542.5p) and Berendsen (-27.5p to 767p).