European shares ended lower in thin volume on Tuesday, with investors cashing in on recent highs after a long-awaited bailout deal for Greece failed to dissipate concerns about the future of the euro zone's most troubled country.

While the agreement averted the imminent danger of a disorderly Greek default, further political and growth hurdles in Greece mean the potential for a messy default, and further regional contagion, was not yet gone.

The FTSEurofirst 300 index <.FTEU3> of pan-European shares fell 0.5 percent to 1,085.89 points, retreating after a two-day winning streak fuelled by expectations the Greek bailout deal was imminent.

Today is a classic 'travel and arrive' situation on the Greek deal, said David Mortlock, global head of equity sales at Berenberg Bank.

Trading was choppy, with volume on the FTSEurofirst at a mere 78 percent of an already thin 90-day average, suggesting conviction behind the selloff was low.

Among a handful of stocks trading in high volume was Italy's third-largest bank Monte Paschi , which rose nearly 9 percent after sources said former UniCredit chief executive Alessandro Profumo was the frontrunner to secure a chairman job.

(Reporting By Francesco Canepa)