European shares extended losses on Friday afternoon, with traders citing conflicting signals sent by the leaders of Germany and Britain about how to solve the euro zone's debt crisis.

At a news conference in Berlin, Prime Minister David Cameron and German Chancellor Angela Merkel admitted they had failed to narrow differences over the introduction of a financial transaction tax in Europe.

At 2:53 p.m., the FTSEurofirst 300 <.FTEU3> index of top European shares was down 0.8 percent at 950.28 points.

(Reporting By Francesco Canepa)