London's leading share index closed 138.8 points, or 1.94%, lower at 7006.9 on Thursday - the biggest fall in percentage terms since June.
The FTSE briefly dipped below the 7,000-mark for the first time since April during a choppy session in the wake of a Wall Street slump on Wednesday and steep declines in Asian markets overnight.
Shares in New York were volatile again on Thursday - briefly looking to stage a recovery from the previous brutal session at one stage before later veering back into the red.
The Dow Jones Industrial Average had seen its worst session for eight months on Wednesday as it fell by 3%, with the S&P slipping by 3% too.
Both extended their losses during the latest session, each down by as much as 1%.