FTSE falls as Greek debt deal wait goes on

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Miner Anglo American fell 2.5 percent as diamond producer De Beers, of which Anglo owns 45 percent, reported a dip in annual production and said it expected to continue to rein in output growth in 2012.

Greece's inability to agree terms acceptable to its creditors to trigger a second bailout package also weighed on the market.

Greek workers went on strike against austerity measures on Friday, docking ships and halting public transport, hours after euro zone finance ministers said Athens needed to make more cuts to convince them to release the bailout cash.

"The market is starting to factor in continuing problems with Greece and if it does default the belief is that it will be contained, and central banks will standby ready to flood the banks with liquidity," David Morrison, strategist at GFT Global, said.

"Ultimately the problem of how the central banks will eventually wind down their balance sheets is just a problem for another day," he said.

EARNINGS CONCERNS

European fourth-quarter earnings reports from the STOXX Europe 600 <.STOXX> are finely balanced, with energy firms posting the biggest positive surprise so far and financials lagging expectations by the biggest margin, Thomson Reuters StarMine data to the Thursday close shows.

Cable and Wireless Communications shed 12.7 percent after it warned that increasing competition and weak demand from corporate clients had hit its business in Panama, taking the shine off solid performances elsewhere.

With risk appetite on the wane given the macro outlook, banks <.FTNMX08350> were mainly lower, although Barclays bucked the weaker trend, up 2.3 percent albeit in choppy trade, as it reported mixed results.