* FTSEurofirst 300 down 0.8 pct after two strong sessions
* Banks tumble despite Deutsche Bank's robust results
* BP sags as oil spill worries eclipse stellar results
* For up-to-the-minute market news, click on []
By Blaise Robinson
PARIS, April 27 (Reuters) - European shares fell in early
trade on Tuesday, snapping a two-day rally, on renewed worries
over Greece's debt after Germany demanded painful new austerity
measures from Athens in return for financial aid.
Banking stocks paced the retreat despite Deutsche Bank's
<DBKGn.DE> forecast-beating quarterly results. Shares of
Germany's biggest lender were down 2.3 percent, dragged by
concerns it won't be able to repeat the strong results in coming
quarters.
Banco Santander <SAN.MC> was down 2.5 percent, Societe
Generale <SOGN.PA> was down 1.1 percent and UBS <UBSN.VX> down
0.8 percent.
At 0825 GMT, the FTSEurofirst 300 <> index of top
European shares was down 0.8 percent at 1,094.33 points.
Greek banks <.FTATBNK> also took a beating, with National
Bank <NBGr.AT> losing 2.7 percent and Alpha Bank <ACBr.AT>
dropping 2.3 percent.
On Tuesday, a budgetary expert for Germany's Free Democrats
(FDP), junior partner in the ruling coalition, said Greece could
still be denied financial aid if Athens fails to do enough to
cut its budget deficit.
The return of fears over debt-stricken Greece dampened
investors' appetite for risky assets across the board, with oil
and metal prices falling while the VDAX-NEW volatility index
<.V1XI>, a measure of investor risk aversion, rose 2.9 percent.
"The Greek situation still weighs on markets, but concerns
over contagion are easing. People realise that it's not a
question of 'if' but 'when' the country will get aid," said
Sebastien Barthelemi, head of credit research at Louis Capital
Markets in Paris.
"There is a lot of politics going on at the moment, but the
bottom line is that a Greek debt default is out of question for
Europe."
BP FALLS AS OIL SPILL CONCERNS MOUNT
Rio Tinto <RIO.L> fell 2.2 percent, Xstrata <XTA.L> dropped
2.5 percent and Anglo American <AAL.L> lost 2.2 percent.
Oil major BP Plc <BP.L> dropped 0.8 percent as stellar
quarterly results were eclipsed by mounting concerns over the
fallout from the massive oil spill in the Gulf of Mexico after
last week's explosion on the Deepwater Horizon rig, with 1,000
barrels of oil per day seeping from the unplugged well that was
being drilled.
Bucking the trend, Norwegian aluminium group Norsk Hydro
<NHY.OL> gained 3.2 percent following stronger-than-expected
first quarter profits and an upbeat outlook for demand in its
markets.
Lloyds Banking Group <LLOY.L> rose 1.7 percent after the
lender said it returned to profit in the first three months of
this year, earlier than expected, and said it expects to post a
profit in 2010 as losses on bad debts drop.
UK insurer Prudential <PRU.L> rose 1 percent on reports its
largest shareholder Capital Group is working on an alternative
to its $35.5 billion acquisition of AIG's Asian insurance
business.
Around Europe, UK's FTSE 100 index <> was down 0.5
percent, Germany's DAX index <> down 0.3 percent, and
France's CAC 40 <> down 0.7 percent.
So far this year, the FTSEurofirst 300 <> is up 4.7
percent, the FTSE up 5.8 percent, the DAX up 6 percent and the
CAC up 0.9 percent.
(Editing by Sharon Lindores)
