(Close): Shares in London joined in the global sell-off after Greece closed its banks and imposed capital controls.
The moves by the Greek authorities came after the European Central Bank decided not to extend emergency funding.
The FTSE 100 fell more than 2% in early trade, and by the close was still down 133.22 points, or 1.97%, at 6,620.48.
Even bigger falls were seen elsewhere in Europe, with Germany's Dax index down 3.56% and France's Cac 40 index dropping 3.74%.
On the currency markets, the euro recovered much of the falls against the dollar that it saw in Asia. At one point, it had fallen below $1.10, but it later came back to $1.1185.
The pound rose 0.05% against the euro to €1.4102 and gained 0.15% against the dollar to $1.5774.
Among individual stocks, shares in travel companies fell after last week's killing of 38 people on a beach near Sousse in Tunisia. Shares in TUI dropped 7.1% and Thomas Cook was 3.7% lower.
Shares in equipment hire company HSS dived 26.6% to 134p after it said its second quarter trading performance had been "marginally below expectations". HSS floated on the market in February, when its shares were priced at 210p.
