Shares in British banks were down on the FTSE 100 in morning trading as ratings agencies downgraded the credit rating of Greece yet again and expressed concerns about Italy, adding to the ongoing concerns about sovereign debt in the eurozone.

Last Friday Greece had its rating cut to B+ by Fitch and in addition put the debt-crippled nation on a negative outlook.

Italy this morning also came into view when Standard & Poor changed its outlook from stable to negative, saying that the country had weak growth prospects and would be in greater danger if it did not cut its debts.

The news appeared to worry investors in risk sensitive banking shares, with Britain's "big four" banks all seeing the value of their shares decline.

By 10:05 shares in Lloyds Banking Group were down 1.86 per cent to 50.65 pence per share, RBS shares declined 1.30 per cent to 40.96 pence per share, Barclays shares dropped 2.21 per cent to 267.55 pence per share and HSBC shares fell 0.94 per cent to 629.10 pence per share.

Overall the FTSE 100 was down 1.61 per cent to 5,852.76.