European shares sent reeling by British exit vote

* FTSEurofirst 300 down 7.5 pct

* Brexit vote hits banks most

* Major UK banks down up to 20 pct

* 650 bln euros wiped off European market cap

By Atul Prakash

LONDON, June 24 (Reuters) - European shares, led by the region's banks, felt the full force of Britain's vote to leave the European Union on Friday, falling by 7 percent as shockwaves spread across global markets.

Sterling hit a 31-year low in its biggest-ever fall and Japan's Nikkei dropped 7.9 percent. In Europe, the slide in stocks wiped off about 650 billion euros ($726 billion) from the market value of Europe's listed shares.

The pan-European FTSEurofirst 300 was down 7.3 percent at 1,261.23 points by 0756 GMT after falling as low as 1,241.94, while the broader STOXX Europe 600 index was down 7.5 percent. Britain's blue-chip FTSE 100 fell 4.3 percent, with volumes hitting more than 100 percent of their 90-day daily average in just one hour of trading.

"The single-largest macro risk for Europe this year ... has crystallised," Goldman Sachs (NYSE: GS-PB - news) said in a note. "The decision lowers the growth outlook for the UK and Europe amid heightened policy uncertainty and threatens tighter financial conditions."

Euro zone banks fell 14.5 percent and were on track for their biggest ever one-day fall on concerns over the fallout of the vote on a regional economy already struggling with low growth. European insurers were down 12.7 percent, while auto shares fell 10.5 percent.

Barclays (LSE: BARC.L - news) , Royal Bank of Scotland (LSE: RBS.L - news) and Lloyds plunged 16.6 to 20 percent. Gold (Other OTC: GDCWF - news) producers Randgold Resources and Fresnillo (Other OTC: FNLPF - news) rose more than 11 percent on expectations that gold, seen as a safe-haven asset, will rise further.

Quitting the EU could cost Britain access to the EU's single market and mean it must seek new trade accords with countries around the world.

The United Kingdom itself could break apart, with leaders in Scotland - where nearly two-thirds of voters voted to stay in the EU - calling for a new vote on independence.

"There is the potential for knock-on consequences for market-moving issues like trade, labour mobility and foreign investment," Rick Lacaille, global chief investment officer at State Street Global Advisors, said.

"How the EU strikes a balance between facilitating a swift UK exit to reduce risk as quickly as possible, and discouraging similar movements in other countries, will be important." ($1 = 0.8947 euros) (Editing by Vikram Subhedar and Alexander Smith)