Worries over the state of the global economy and America's crippling debt deadlock hammered stock markets and pushed the FTSE 100 Index to a three-month low.
An upgrade to Britain's growth prospects by the International Monetary Fund (IMF) was more than offset by its warning that a slowdown in emerging markets will weigh heavily, as it downgraded global growth prospects to just 2.9% this year.
The FTSE 100 closed down 71.5 points at 6365.8, a 1.1% fall, while bourses in Europe also lost ground despite the IMF now saying the eurozone will shrink by less than expected this year.
The IMF called for America to "promptly" raise its debt ceiling deadline, as the impasse ensures a partial government shutdown drags on.
There are further fears that Congress will not meet a deadline of October 17 to approve additional borrowing, resulting in the spectre of the world's largest economy defaulting on its debt.
That ensured more heavy falls for Wall Street's Dow Jones Industrial Average in early trading.
Retailer Marks & Spencer was among the heaviest top flight fallers in London amid mounting worries that its star-studded clothing relaunch is falling flat.
Shares in the retail giant were down 3.4%, after shedding almost 3% on Monday, as new market share data poured doubt on its clothing turnaround and City analysts downgraded its prospects.
M&S chief executive Marc Bolland is attempting to revive the chain's flagging general merchandise performance with an advertising campaign featuring Dame Helen Mirren and Olympic boxer Nicola Adams.
Figures from researcher Kantar Worldpanel showed M&S's share of the womenswear market fell further in the 24 weeks to the end of August, while analysts at Deutsche Bank and Credit Suisse cut their general merchandise forecasts for the chain to negative for the three months to the end of September.
Its shares were another 16.5p lower to 463.8p, after hitting a five-and-a-half year high last month.
Broadcaster ITV was near the top of a shortened FTSE 100 risers board, as its shares closed at 183.6p, a rise of 1.8p in the session.
The company behind Downton Abbey and Coronation Street is benefiting from chief executive Adam Crozier's drive to offset volatile advertising markets through spending on original TV content.
Persimmon was a rare climber among housebuilder in a lacklustre session for the sector, despite lenders launching new mortgage products backed by the Government's Help to Buy loan guarantees, which aim to add further fuel to the housing market.
Taxpayer-backed Royal Bank of Scotland and its subsidiary NatWest, as well as Halifax, part of the Lloyds Banking Group, began publishing details of deals under the scheme.
Persimmon advanced 10p to 1077p, but Barratt Developments slipped 1.1p to 308.9p in the FTSE 250, and Bovis Homes shed 6p to close at 700.5p.
The biggest risers on the FTSE 100 were Antofagasta up 13p to 833.5p, Fresnillo 11p stronger to 942.5p, ITV up 1.8p to 183.6p and Persimmon 10p ahead to 1077p.
The biggest fallers on the FTSE 100 were Travis Perkins down 62p to 1578p, Marks & Spencer 16.5p lower to 463.8p, Standard Life 10.4p weaker to 341.1p and Mondi down 27p to 1038p.