World markets slumped into the red rattled by fears talks to avoid the US fiscal cliff are in disarray.
The FTSE 100 Index pulled back further from the 6000 mark, down 18.3 points to 5939.9, as the Plan B put forward by House Speaker John Boehner failed to gather enough support among Republicans for it to go to a vote.
At a press conference, Mr Boehner said congressional leaders and President Barack Obama must try to move on from the failed tax plan, but there is little time for US President Barack Obama to secure a deal to prevent automatic tax rises and spending cuts on January 1.
Data which showed US consumers spent and earned more in November failed to cheer investors and the Dow Jones Industrial average also opened sharply lower.
Britain’s shaky economic recovery was also in the spotlight as gross domestic product figures revealed the third quarter bounce back was not as strong as first estimated, with growth revised down from 1% to 0.9%.
The pound was down against the US dollar and the euro at 1.61 and 1.22 respectively after it emerged the government borrowed a more-than-expected £17.5bn in November, up £1.2bn on the same month last year.
The biggest FTSE 100 risers were Randgold Resources up 160p at 6125p, Severn Trent ahead 41p at 1610p, Carnival up 51p at 2442p and Polymetal International ahead 17p at 1176p.
The biggest FTSE 100 fallers were Evraz down 9.2p at 257.8p, Resolution off 6.8p at 250.1p, Compass down 19.5p at 723p and Prudential off 23.5p at 872p.