Following a late sell-off, the FTSE 100 index closed 23 points, or 0.4%, lower at 5,877.
Leading the losers was Kingfisher, which slumped 6% after announcing a five-year plan that involved returning cash to shareholders but also hefty exceptional costs.
Shares in Lloyds Banking Group fell 5.6% after analysts at JP Morgan cut their target price for Lloyds' shares.
Other banks also fell, with Barclays down 4.7% and RBS down 4%.
"Fundamentally, the situation is no different to how it was a number of weeks ago," said Brenda Kelly, head analyst at London Capital Group.
"The FTSE, having initially started proceedings oscillating the 5,900 level has already begun to falter, with the materials sector providing what has become a fairly habitual drag on the UK benchmark," she said.
Oil prices fell again, with Brent crude dropping 4% to $30.86 a barrel, reversing some of Friday's surge.
Earlier in Tokyo, the Nikkei 225 managed to stay positive, closing up 0.9% at 17,110.9.
On the currency markets, the pound was down by a fifth of a cent against the dollar at $1.4246, and it fell two fifths of a cent against the euro to â‚¬1.3173.
(Close): Shares in London closed lower as oil prices tumbled.