Shares in British banks were broadly down on the FTSE 100 in morning trading as political violence and unrest continued to engulf the oil rich nation of Libya.

Yesterday it was reported that despite a severe crackdown by security forces, resulting in hundreds of deaths, opposition groups took control of the eastern city of Benghazi. There were also indications that Libya's ruler, Colonel Gaddafi was fleeing to Venezuela, although these rumours were dismissed by Gaddafi, who appeared on TV in Tripoli last night.

Some army units are also believed to have defected to the protestors, as have leading tribal groups.

The news appeared to do little to promote investor confidence.

By 10:00 shares in Lloyds Banking Group were down 0.39 per cent to 66.29 pence per share, Barclays shares declined 0.40 per cent to 320.95 pence per share and HSBC shares dropped 1.02 per cent to 697.20 pence per share.

However RBS saw its shares increase 0.77 per cent to 47.00 pence per share.

Overall the FTSE 100 was down 1.04 per cent to 5,952.31.