Cyprus's shock plans to impose a tax on bank accounts as part of its bailout package has seen the FTSE 100 fall by one per cent this morning with banks suffering the sharpest falls.
By 0829 GMT, the FTSE 100 was down 62.31 points, or one per cent, at 6,427.34.
Cyprus' rescue deal has sent shivers through southern Europe after a key eurozone figure said it would be a model for future bailouts.
The future is uncertain for the people who must live with the consequences of Cyprus' "painful" bailout deal.
The Dutch Finance Minister has said the bank levy 'bail-in' on large depositors "pushes back the risks" from the rest of the eurozone.