Shares in British banks were down on the FTSE 100 in morning trading as investors continued to show caution in the face of the still unfolding disaster in Japan.

Today the Nikkei dropped 10.55 per cent to 8,605.15 as fears continue to centre on Japan's nuclear plants, with reports that radiation has started to leak out into the atmosphere and the surrounding area.

The fall in the Nikkei was even sharper than on Monday, when the index declined 6.18 per cent.

This morning only one of the FTSE 100 listed companies (Next Plc) saw its shares rise, with all other companies seeing falls.

By 10:25 shares in Lloyds Banking Group were down 1.37 per cent to 59.80 pence per share, RBS shares declined 3.66 per cent to 40.32 pence per share, Barclays shares dropped 2.72 per cent to 286.55 pence per share and HSBC shares fell 0.80 per cent to 644.80 pence per share.

Overall the FTSE 100 was down 2.46 per cent to 5,633.29.