Banking stocks are back in the firing line as jitters intensified over the outcome of Greece’s debt crisis.

With a meeting of EU finance ministers in Poland failing to make headway and Greece unable to convince investors that it can meet its obligations, the FTSE 100 Index dipped nearly 2%, or 95.2 points, to 5273.2.

In Germany, the Dax was down by 2.4% after a regional election defeat for Angela Merkel’s government added to the market uncertainty.

London’s top flight, which rose 3% last week, was driven lower by banking stocks as Royal Bank of Scotland slipped 1.5p to 22.7p and Barclays fell 10.1p to 153.3p. Lloyds Banking Group, which announced the departure of finance director Tim Tookey, fell 2.4p to 33.4p, a drop of 6%.

In other corporate news, Ocado shares were back under pressure after the online grocer said margin growth was being squeezed by ongoing efforts to stem a recent decline in customer service standards.

The update did little for confidence in the firm, which floated on the stock market in July 2010 at 180p per share but has seen its price drop as low as 106p amid doubts it can compete with supermarket home delivery services.

Shares were down 14%, or 18.15p, at 115.55p.