European shares extended losses on Thursday afternoon, with traders citing concerns Greece might activate collective action clauses (CACs), which would effectively trigger an outright default.

Greek Finance Minister Evangelos Venizelos warned his country was ready to activate CACs to enforce losses on Greece's private sector creditors if they do not accept the country's debt swap offer, in a move that would take Athens closer to an outright default.

News that the Greece government is willing and ready to force existing bondholders into exchanging them for new bonds with a haircut of 53.5 percent would almost certainly trigger CDS (credit default swap), a trader said.

At 3:44 p.m., the FTSEurofirst 300 <.FTEU3> index of top European shares was 0.6 percent lower at 1,080.31 points.

(Reporting By Francesco Canepa)