FTSE tumbles 6.8 pct as UK plan fails to lift banks

* FTSE 100 falls 6.8 pct

* Banks mostly weak despite UK rescue package

* Heavyweight commodity stocks fall on growth concerns

(Click on [nCRISIS] for more on financial turmoil)

By Dominic Lau

LONDON, Oct 8 (Reuters) - Britain's top share index slid 6.8 percent early on Wednesday as the global financial crisis raised fears of a deep recession, battering heavyweight commodity stocks, and banks remained weak despite a UK rescue package.

By 0804 GMT, the FTSE 100 .FTSE was down 316.8 points at 4,288.5 to a fresh four-year low. The index has fallen 31.5 percent so far this year.

Most UK banks extended their battering this week, with the FTSE 350 banks index .FTNMX8350 down 7.8 percent, despite the UK government unveiling a multi-billion pound support package for the sector.

Finance Minister Alistair Darling said in a statement the plan would offer banks short-term liquidity, make new capital available to banks and give the banking system enough funds to maintain lending in the medium-term.

HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz), Lloyds TSB (LLOY.L: Quote, Profile, Research, Stock Buzz), Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz), Barclays (BARC.L: Quote, Profile, Research, Stock Buzz) and Standard Chartered (STAN.L: Quote, Profile, Research, Stock Buzz) sank between 5.9 and 17.2 percent.

HBOS (HBOS.L: Quote, Profile, Research, Stock Buzz) was up 16 percent, the only gainer on the index.

HSBC said it had no current plans to utilise the initiatives by the UK authorities to recapitalise the country's struggling banking sector.

"The UK market is down a lot less than other European markets this morning. It tells its own story. Obviously equities are not the flavour of the month to put it mildly, but the UK appears to be lifted ... preventing it from collapsing," said Peter Dixon, UK economist at Commerzbank.

"We are still working through the implication of this ... where we go from here. Certainly the initial reaction is that it is not very positive but it could be a lot worse."

The pan-European FTSEurofirst 300 index .FTEU3 was down 7.1 percent.  Continued...