European shares extended falls on Friday, with euro zone banks lower after a senior euro zone government source said credit rating agency Standard & Poor's was set to downgrade several countries in the region.

At 3:25 p.m., the FTSEurofirst 300 <.FTEU3> index of top European shares was down 1 percent at 1,009.09 points.

The STOXX Europe 600 Euro Zone Banking Index <.SX7E> fell 0.7 percent reversing earlier gains.

(Reporting by Brian Gorman)