European shares fall for third day on debt worries

                                
 * FTSEurofirst 300 down 1.5 percent
                                
 * German utilities down on tax hike
                                
 * BP falls as Obama intensifies attack
                                
 * For up-to-the-minute market news, click on [STXNEWS/EU]
                                
 
                                
 Brian Gorman
                                
 LONDON, June 8 (Reuters) - European shares fell on Tuesday,
extending a decline to a third day, on intensified worries about
debt levels in Europe and with German utilities weaker as they
face a tax hike.
                                
 Ratings agency Fitch unsettled British investors after
saying "the scale of the UK's fiscal challenge is formidable and
warrants a strong medium term consolidation strategy --
including a faster pace of deficit reduction than set out in the
April 2010 budget."
                                
 At 0929 GMT, the FTSEurofirst 300 <.FTEU3> index of top
European shares was down 1.5 percent at 975.89 points. The index
is down more than 12 percent from a mid-April peak, on worries a
debt crisis in Europe will derail recovery, though it is still
up more than 51 percent from its lifetime low of March 9, 2009. 
                                
 Several European economies have pledged to cut spending to
trim debt, but this has prompted worries about growth.
                                
 "There's a growing, pervasive sense of unease," said Mike
Lenhoff, chief strategist and head of research at Brewin Dolphin
Securities in London. "Maybe the way the markets are beginning
to look at this now is that the fiscal austerity is going to be
a major restraining feature.
                                
 "Some countries, like Canada, are tightening. There's been a
withdrawal from the entire reflationary thrust. Markets don't
feel warranted in moving ahead, after having had a very good
run."
                                
 Shares in Germany's utilities were lower, with RWE <RWEG.DE>
falling 3.6 percent and E.ON <EONGn.DE> down 4.2 percent on the
back of a government announcement to impose a tax on nuclear
fuel.
                                
 The heavyweight banking sector was also lower. BNP Paribas
<BNPP.PA>, Banco Santander <SAN.MC>, BBVA <BBVA.MC>, Credit
Agricole <CAGR.PA> and UniCredit <CRDI.MI> fell between 3.1 and
3.7 percent.
 Across Europe, Britain's FTSE 100 <.FTSE>, Germany's DAX
<.GDAXI> and France's CAC40 <.FCHI> were down between 1.3 and
1.6 percent.
                                
 Spain's IBEX <.IBEX>, Italy's benchmark <.FTMIB) and
Portugal's benchmark <.PSI20> fell between 1.4 and 2.1 percent.
                                
 
                                
 TESCO FALLS
                                
 Among individual companies, British supermarket group Tesco
<TSCO.L> fell 2.6 percent after Terry Leahy, chief executive for
14 years, said he was stepping down next year. [ID:nLDE6570BS]
                                
 BP <BP.L> lost 3.6 percent as U.S. President Barack Obama
stepped up his attack on the company following an oil spill in
the Gulf of Mexico. BP shares are down more than a third from
mid-April. [ID:nN08211982]
                                
 Most other oils were lower, including Total <TOTF.PA> and
ENI <ENI.MI> down 2 and 1.6 percent respectively, as  crude
prices <CLc1> slipped towards $71.
                                
 Earlier, markets had been encouraged by upbeat remarks from
U.S. Federal Reserve Chairman Ben Bernanke, who said European
leaders are committed to ensuring the survival of the euro and
have enough money to meet obligations of heavily indebted member
countries.
                                
 He also said the U.S. economy appeared to have enough
momentum to avoid a "double-dip" recession, citing strengthening
consumer and business spending.
 (Editing by Sharon Lindores)