Shares in British banks were down on the FTSE 100 in morning trading as an agreement on Greek debt continued to prove elusive.

Eurozone ministers will meet yet again in Luxembourg today in an attempt to agree terms for a second Greek bailout, estimated to cost 90 billion to 120 billion euros.

Greece looks almost certain to default on its debt if no extra funding can be found, an instance which some fear could be a "Lehman Brothers moment" that would spell the end of the euro and the start of a new financial crisis.

Others however have suggested a default and an exit from the euro would be better for Greece in the long term as it would allow the nation to devalue and slowly return to growth.

Either way, the uncertainty and heightened sense of risk appeared to worry investors.

By 09:35 shares in Lloyds Banking Group were down 2.84 per cent to 47.02 pence per share, RBS shares fell 2.36 per cent to 39.34 pence per share, Barclays shares declined 2.16 per cent to 251.65 pence per share and HSBC shares dropped 1.33 per cent to 599.20 pence per share.

Overall the FTSE 100 was down 1.03 per cent to 5,656.12.