The blue chip FTSE 100 index dropped 112.45 points, or 1.8 percent, to 6,053.35 points by the close, underperforming the broader European market.

British travel stocks came under pressure after mid-cap Thomas Cook slumped 19 percent to its lowest level since March 2013 after saying that summer bookings were down 5 percent as tourists avoided Turkey.

"The fact that you're going to confess that you're going to have earnings at the bottom end of the range for the coming period is certainly going to keep investors rather cautious overall," Chris Beauchamp, senior market analyst at IG, said.

Its blue-chip peer travel company TUI fell 2.7 percent.

News that an EgyptAir flight carrying 66 passengers and crew from Paris to Cairo disappeared over the Mediterranean weighed on the sector.

The FTSE 350 Travel & Leisure index fell 1.9 percent.

Commodity stocks were also among the top sectoral fallers, with oil stocks and miners down between 3-4 percent after U.S. Federal Reserve minutes released late on Wednesday signalled that an interest rate hike was on the table for June.

The sectors were hit after a stronger dollar put pressure on Brent crude and metals prices, as commodities became more expensive for buyers paying with other currencies. [MET/L]

"With June now live, you can hardly ... (blame) people continuing to push into the U.S. dollar which spells a difficult period for commodity prices, which makes it difficult for miners," IG'S Beauchamp said.

Fresnillo fell 7 percent, the top fall on the FTSE 100, as the precious metals miner was also hit by a downgrade to "sell" from "neutral" by Citi.

Royal Mail Plc dropped 3.9 percent after warning it faced slightly higher than expected costs to modernise its operations in what it said was an extremely competitive domestic market.

Merlin also warned of tough trading conditions, saying London was a tough market as it reported results broadly in line with expectations. Its shares fell 4.7 percent.

Stocks going ex-dividend also weighed, with financial services firm Provident Financial falling 2.9 percent.

Top riser on the FTSE 100 was private equity firm 3i Group, up 2.5 percent after it reported a 17 percent increase in its net asset value year-on-year to 4.5 billion pounds.

"Venture capital group 3i was the FTSE 100 stand-out performer despite warning that market volatility and the EU referendum will weigh on sentiment with reduced mergers and acquisitions and delays in capital investment likely to persist while the uncertainty remains," AJ Bell Investment Director Russ Mould said in a note.

"3i’s selective investment approach and balance sheet strength positions it well to deal with these uncertain economic and financial conditions."

(Editing by Janet Lawrence)

By Kit Rees and Alistair Smout