Top shares slipped on Wednesday morning, led by banks on concerns that the bailout package for Greece has not put an end to the euro zone debt saga but has just averted a messy default in the near term.

The FTSE 100 index <.FTSE> was down 14.00 points, or 0.2 percent, at 5,914.20 by 9:56 a.m., extending Tuesday's 0.3 percent fall.

Richard Hunter, head of equities at Hargreaves Lansdown, said the Greek bailout was more of a reprieve rather than a rescue ... it does not necessarily solve the long-term problem.

Probably, the biggest question that has remained unanswered coming out of it is the implications for other nations.

In a sign of investor anxiety, one trader noted aggressive buying of put options and selling of calls, saying that with the Greek deal largely factored in, worries about European growth and higher oil prices were hurting sentiment.

Economic data on Wednesday suggested the euro zone may slide back into recession. The key service sector shrank unexpectedly in February while growth in Germany's manufacturing and services sectors also slowed.

Volumes on the FTSE 100 were thin, highlighting concerns among investors about injecting cash into the market when fears about longer-term issues over Europe's debt situation remained.

Manoj Ladwa, a trader at ETX Capital, said the FTSE 100, which is near a seven-month high, could be poised for a move down, targeting the 5,700 level, the bottom of the recent rally.

Banks, whose share prices have been closely correlated to the twists and turns of the debt crisis, knocked the most points off the FTSE 100 index.

Part state-owned banks -- Lloyds and Royal Bank of Scotland -- outperformed domestic peers ahead of earnings due later this week, buoyed after Espirito Santo lifted its target prices for the pair.

The broker, which kept its neutral rating on both stocks, said they were making progress restructuring and running down troublesome non-core operations.

Negative broker sentiment weighed on Tesco , down 1.5 percent and among the top blue-chip fallers, as BofA Merrill Lynch cut its rating on Britain's top retailer to underperform.

Tesco has format and brand/offer issues in the UK that will take time to fix; and international performance remains mixed, BofA ML said in a note.

Among gainers, Rexam rose to its highest level in nearly four years, up 4.7 percent, after the drinks can maker put its underperforming personal care business up for sale and said it would look to return cash to shareholders.

(Editing by Dan Lalor)