Europe's main stock markets slumped on Tuesday, mirroring sentiment across Asia and on Wall Street over fears about Greece's cash crisis and eurozone future.
London's benchmark FTSE 100 index shed 1.82 percent to stand at 6,902.12 points approaching midday in London.
Frankfurt's DAX 30 tumbled 2.14 percent to 11,424.04 points, and the CAC 40 in Paris lost 1.76 percent to 4,939.54 compared with Monday's close.
"European equities are trading sharply lower... extending yesterday's losses after Greece’s increasingly dire financial situation is once again taking centre stage," said Markus Huber, senior analyst at brokers Peregrine & Black.
Greece was forced to tap into an emergency account to meet a debt repayment of 750 million euros ($845 million) due Tuesday to the International Monetary Fund, a central bank source told AFP.
Greece narrowly averted a default Tuesday that could have seen it crashing out of the euro, but warned it faced another cash crunch in two weeks without a bailout deal with its EU-IMF financiers.
In foreign exchange the European single currency managed to rise against the dollar on some relief at Athens's payment -- trading at $1.1260 from $1.1154 late in New York on Monday.
Greece's new radical left government scrapped enough cash together Monday to place the order for the repayment of 750 million euros after pledging to honour both its international and domestic debt obligations.
Greece won some support in the latest round of debt talks as it battles to keep itself solvent, but eurozone finance ministers have demanded more key reforms before they agree to release the final 7.2-billion-euro tranche of its EU-IMF bailout.
"While the Greeks may have stumped up some cash to appease their creditors in the short term, unless they can get through the current impasse and reach agreement on austerity measures, markets will remain jittery," said Mike McCudden, head of derivatives at stockbroker Interactive Investor.
On the corporate front, shares in EasyJet dived after the budget carrier said a strike by French air traffic controllers last month would slash profits.
It comes after the British airline said it had managed an unlikely profit during its first half, a period when carriers normally report losses, thanks to lower fuel costs and a stronger pound.
But EasyJet shares tumbled 10.2 percent in London morning deals to 1,646 pence after it said that April's strike action by French air traffic controllers would hit pre-tax profits by £25 million ($39 million, 35 million euros).
"Warning of turbulence ahead has taken the shine off a sunny start after delivering profits in its seasonally weaker first half," said Peter Ward, dealer at London Capital Group.
"Cheaper fuel costs helped the first half as expected, but... French strike action as EasyJet embarks upon its key summer travel season has ruffled investors."