The FTSE fell 0.4 percent, having earlier gained as much as 0.4 percent thanks to a pull back in the pound that helped it recover from the losses seen in morning trade.

ABC News reported that former U.S. national security adviser Michael Flynn was prepared to testify that Trump directed him to make contact with Russians when he was a presidential candidate.

Reuters could not immediately verify the ABC report, which sent Wall Street and other bourses sharply lower.

"The question is now how much damage this can do to Trump and just what else will Flynn testify when under oath," said James Hughes, Chief Market Analyst at AxiTrader.

While most stocks ended in negative territory as a result of the newsflow from the United States, energy shares managed to end in positive territory after OPEC and other major producers agreed to extend output cuts, sending the oil price higher. [O/R]

Shares in heavyweights Royal Dutch Shell and BP rose 0.6 and 0.3 percent respectively.

Financials were the biggest weight on the FTSE. The banking index fell 1.2 percent, having earlier been hit by disappointment over a delay to voting on the U.S. Senate's tax bill.

Among British mid caps, which fell 0.5 percent, drugmaker Indivior was the standout mover.

Its shares rose as much as 13 percent after its drug to fight opioid addiction was approved by the U.S. Food and Drug Administration.

"We believe this decision is key for Indivior's investment case and the company was highly sensitive to the outcome," analysts at Jefferies said in a note.

"A decent label and price should also, in our view, help support near-term sentiment and a re-rating of the shares," Jefferies added.

The stock pared gains to end up 3 percent

(Additional Reporting by Kit Rees; Editing by Toby Chopra)

By Danilo Masoni