Britain's FTSE snaps winning streak, falls back from 3-week high

* FTSE 100 down 0.2 pct

* FTSE outperforms euro zone

* Ex-divs weigh on the index

* Admiral drops after Citi downgrade

By Alistair Smout

LONDON, June 25 (Reuters) - Britain's top share index fell on Thursday, set for its first decline in five sessions as waning optimism that a Greek debt deal could be reached soon took the index further away from a three week high.

The FTSE 100 fell 13.56 points, or 0.3 percent, to 6,831.24 by 0745 GMT.

The index hit 6,873.43 in the previous session, its highest level since June 4, but fell away after Greece said international lenders had rejected its latest proposals to avert default.

Optimism that a deal may be reached ahead of a meeting of European leaders later on Thursday has largely dissipated, and Greece's ruling Syriza party dismissed reform demands from the country's international creditors as "blackmail".

While the FTSE was set to fall for the first session since last week, its outperformance against continental indexes continued, with euro zone shares deeper into negative territory.

"It's fears as to what happens next with the Greek debt bail out talks that are spooking the market. Last night's divergence between the two sides has clearly rocked sentiment," said Tony Cross, market analyst at Trustnet Direct.

"Although the downside in London may be looking quite limited right now, the picture is far worse on the continent."

The FTSE's top fallers traded without entitlement to their latest dividend payout, with United Utilities (LSE: UU.L - news) , Experian and Compass falling between 0.8 percent and 3.8 percent as they went ex-div.

Insurance firm Admiral Group (LSE: ADM.L - news) dropped 2.6 percent after a downgrade by Citi to "sell" from "neutral".

"We downgrade Admiral due to our concern that its dividend may increasingly come under pressure if the market remains competitive due to a lack of 'self-help' options and its inherently high payout ratio," analysts at Citi said in a note.

Mid-cap shares outperformed, with the FTSE 250 flat. Top riser was Petrofac, up 3 percent after an upgrade to "buy" from "neutral" by Nomura. (Reporting by Alistair Smout; Editing by Keith Weir)