By Carla Mozee, MarketWatch

LONDON (MarketWatch) -- European stocks dropped Tuesday, with uncertainty about Greece's future in the eurozone swirling anew after debt talks between Greece and its creditors fell apart abruptly.

The Stoxx Europe 600 was down 0.5% to 374.85, with Greek bank stocks among the sharpest decliners after talks among eurozone finance ministers and Greece collapsed late Monday. Greece's new anti-austerity government rejected an extension to its 240-billion-euro ($272 billion) bailout program under the conditions offered by its European partners.

Piraeus Bank SA shares lost 8.5%, National Bank of Greece SA lost 7.5%, and Eurobank Ergasias SA slumped 6.9%. The move also pressured Greece's Athex Composite , which fell 3.3% to 831.09. The Athex's year-to-date gain has now been reduced to 15%.

A new Eurogroup meeting may be scheduled for Friday. The euro (EURUSD) had been lower after the breakdown in talks, but recently recovered to buy $1.1376, versus $1.1356 late Monday.

On the major European benchmarks, Germany's DAX was down 0.9% to 10,830.25, France's CAC dropped 1% to 4,704.27, and the U.K.'s FTSE 100 slipped 2 points to 6,854.82.

Subscribe to WSJ: http://online.wsj.com?mod=djnwires