BP lost 6 per cent to 484p and other oil groups fell by similar amounts as the price of oil slid below $45 a barrel.

BG Group was down 6 per cent and Petrofac, the oil field service group, lost 5 per cent. Yesterday Europe's most productive oil and gas producer, StatoilHydro, scrapped plans for a C$16 billion Canadian oil sands project, becoming the lastest oil giant to do so as the falling price of oil makes it uneconomic.

Miners were also sliding again for a third successive day amid worries that they will all be required to renegotiate bank debt or have rights issues if metal prices fail to recover.

Lonmin, which Numis analysts yesterday predicted would be lossmaking by the end of next year, fell hardest, down 12 per cent at 577.5p. Xstrata, also forecast to breach covenants next year if prices do not recover, fell 10 per cent to 565.5p.

Even BHP Billiton, seen as having the healthiest balance sheet after pulling out of its bid for Rio Tinto, fell 6 per cent to 992p.

The FTSE 100 was down 51.51 at 4,112 by 11am.

BT was up 3 per cent after Ofcom allowed it to raise prices that it charges rivals for broadband connections to its exchanges.

In the FTSE 250, Misys was the top gainer, up 12 per cent after UBS upgraded to "buy", saying that its market capitalisation of £429 million was roughly the same as 55 per cent of the market value of its US-listed joint venture Misys Allscripts. That meant its banking software arm, which is not part of the merger, is valued at just £29 million.

Yell Group fell 10 per cent to a new low of 38p on worries that its recent renegotiated loan would be insufficient to stave off declining ad revenues and that a rights issue would be necessary at some stage. Seat Pagine Gialle, the Italian directory group which owns rival Thomson, is in talks with its banks about new loans and an equity issue.

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