(REUTERS) - Britain's FTSE 100 fell early on Tuesday, giving up some gains from the previous two sessions as investors waited for the outcome of a European finance ministers meeting which will attempt to contain the region's debt crisis.

EU ministers will meet to agree the terms of bolstering their bailout fund to help prevent contagion in bond markets, where Italian and Spanish debt yields have been pushed to unsustainable long-term levels.

The truth is that markets once again are hoping, praying, that European officials will finally step up to the plate, Henk Potts, market strategist at Barclays Wealth, said.

Markets (have) just become increasingly nervous and you increasingly see the effects of the uncertainty and the risk of contagion increasing.

Sentiment was dampened early on as Moody's ratings agency warned it could downgrade the subordinated debt of 87 banks across 15 countries on concerns that governments would be too cash-strapped to bail them out.

Fitch Ratings agency cut its U.S. outlook to negative, although it left the country's stellar credit rating untouched, while traders, citing a report in French newspaper La Tribune, said S&P may give France a negative outlook in next couple of weeks.

Having added 148.11 points in the previous session, which traders put down to optimism before the meeting in Europe and technical repositioning ahead of the month-end, the FTSE 100 shed 34.03 points, or 0.6 percent to 5,278.13 by 0900 GMT.

Heavyweight banks dragged the most after Moody's comments. Part state-owned Royal Bank of Scotland and Lloyds Banking Group fell as much as 3 percent, while Barclays was down 1.3 percent.

Concerns over the worsening macroeconomic outlook prompted UBS and Citigroup -- following the OECD's warning on Monday of threats to global economic growth -- to cut their global GDP forecasts for 2012.

Growth is being stifled by the level of debt being shouldered by governments around the world, and the austerity measures they are putting in place to prevent it from accumulating further.

Those austerity plans are causing unrest among workers, which is having a knock on effect to corporates such as British Airways owner International Airlines. It fell 2 percent, as it braced for disruption to services on Wednesday when UK border staff at London's largest airport are set join a mass strike over public sector pensions.

As investors went back into risk off mode, miners fell too. Rio Tinto shed 2.4 percent as Deutsche Bank and UBS cut their respective earnings estimates and target prices on the global miner following an investor day.

Rio again outlined a positive long term outlook for iron ore and aluminium demand but highlighted near term earning headwinds, Deutsche Bank said in a note.

On the upside, G4S climbed 0.8 percent, as HSBC lifted its rating on the security firm to overweight from neutral, with the bank citing valuation grounds.

GKN was the top performer on the FTSE 100, up 1.4 percent, with traders citing technical reasons for the move.

The car and plane parts maker's shares have traded below their 50-day moving average since mid-Nov despite a bullish third-quarter update in October, while the relative strength index suggested there was still plenty of room for further upside.

On the macro economic data front, October Bank of England consumer credit and mortgage lending data are due at 0930 GMT.