Britain's top share index fell back on Tuesday, reversing the previous session's modest gains in tandem with weakness on Wall Street and in Asia as concerns over the U.S. "fiscal cliff" held sway.
U.S. blue chips ended 0.5 percent lower as the White House dismissed a budget deal proposal from congressional Republicans that included tax reforms and spending cuts, saying it did not meet President Barack Obama's pledge to raise taxes on the wealthiest Americans.
U.S. political parties are discussing ways to delay a US$600 billion fiscal cliff of year-end austerity measures due at the start of 2013 that could send the world's largest economy into recession.
At 0809 GMT, the FTSE 100 index was down 16.65 points, or 0.3 percent at 5,854.59.
The UK blue chip index closed 0.1 percent higher on Tuesday, losing ground late in the session following some dull U.S. manufacturing data, having run back from an early session peak just above the psychologically important 5,900 level.
Precious metals miners Fresnillo and Randgold Resources were the top two blue chip losers, both down 1.1 percent, as gold retreated on technical selling after prices broke below key support levels.