European equities end lower as Greek banks and oil shares slip

* FTSEurofirst 300 ends down 0.2 pct after seven-year high

* Greek banks fall sharply on debt repayment concerns

* Tullow down on project delay and FTSE demotion worries

By Atul Prakash

LONDON, March 2 (Reuters) - European shares ended lower after setting new multi-year highs on Monday, with Greek banks slipping on lingering concerns about the country's debt and energy shares tracking a sharp decline in crude oil prices.

The Greek banking index fell nearly 10 percent, while lenders National Bank (NYSE: NBHC - news) of Greece, Piraeus Bank and Alpha Bank (Other OTC: ALBWF - news) fell 10.0 to 11.8 percent to feature among the top decliners.

"The fears about a possible default for Greece are certainly not completely off the table," Gerhard Schwarz, head of equity strategy at Baader Bank (Xetra: 508810 - news) in Munich, said.

"The market is clearly overbought and we see a pull-back to digest the overheating we had over the last couple of weeks. We will probably just have a breather as the prerequisites of a sharper sell-off are not in place given that continued improvement in the economy and a very good liquidity situation."

Greece called into question on Saturday a debt payment it must make to the European Central Bank this summer after acknowledging that it faces problems in meeting its obligations. German Chancellor Angela Merkel said on Monday Greece needs to give more details on the reforms it promised in return for the extension of its aid programme.

The FTSEurofirst 300 index closed 0.2 percent lower at 1,560.59 points after rising earlier to 1,567.68, the highest since late 2007. Across Europe, Germany's DAX ended 0.1 percent higher and Britain's FTSE 100 fell 0.1 percent after both the indexes setting new record highs.

Energy shares were hit hard, with the STOXX Europe 600 Oil and Gas index falling 1.5 percent to the bottom of the sectoral decliners' list after oil prices fell 3.9 percent. Tullow Oil (LSE: TLW.L - news) dropped 7.7 percent also on worries about project delays and its likely ejection from Britain's FTSE 100 share index.

"Investors are worried that a likely drop from the FTSE will prompt tracker funds and some exchange-traded funds to sell Tullow Oil shares to reduce their weightings," Jawaid Afsar, trader at Securequity, said.

Shares (Berlin: DI6.BE - news) in Vivendi (Swiss: VIV.SW - news) fell 4.9 percent after the French media group agreed to sell its remaining stake in Numericable-SFR to Altice at a price traders viewed as low. Vivendi slipped despite announcing a share buy-back at a maximum purchase price of 20 euros a share.

Numericable rose 5.3 percent and Altice was up 3.3 percent.

Analysts said they were also disappointed by the small scale of the share buy-back Vivendi announced along with its fourth-quarter results on Friday. (Additional reporting by Francesco Canepa; Editing by Ralph Boulton)