FTSE 100 ends on a flat note, lawmakers' votes on Brexit process eyed

* FTSE 100 down 0.03 pct

* FTSE 250 down 0.01 pct

* Oil weighs on the index, financials gain

* Debenhams surges on Sports Direct's possible bid

* Midcap Avast drops after discounted stake sale (Adds company news items, changes quote, updates to closing prices throughout)

By Muvija M and Yadarisa Shabong

March 27 (Reuters) - London's FTSE 100 struggled to stay afloat ahead of indicative votes on a series of alternate Brexit options in parliament and a sharp drop in oil majors offset a rally in financial stocks.

Worries of an economic slowdown also resurfaced.

Although both the FTSE 100 and the more domestically focused FTSE 250 started the day with gains, they ended in negative territory albeit with marginal losses.

As the Brexit saga rolls on, a member of the British parliament said Prime Minister Theresa May told Conservative Party lawmakers that she would quit if her twice-defeated Brexit deal gets approved by parliament.

The British parliament is set to hold so-called indicative votes later this evening on Brexit, with eight options ranging from leaving abruptly with no deal to revoking the divorce papers or holding a new referendum.

"Time is running out though and without parliament coalescing around a majority view, the default is still no-deal," said Neil Wilson, Markets.com analyst.

Shell and BP slipped as crude prices dipped following an unexpected rise in U.S. crude stocks last week as exports slowed after a chemical spill along the country's busiest energy port.

Helping cushion the fall were financial stocks, which rallied ahead of parliamentary votes. Lloyds, Barclays , Royal Bank of Scotland were among the top boosts to the index.

"The banks are higher as the mood is optimistic ahead of the indicative votes in Westminster later, the process should shed some light on what MPs actually want, rather than what they don’t want," said CMC Markets analyst David Madden.

That, and strong half-year results from midcap homebuilder Bellway, led to gains in housebuilders, which are considered to be particularly Brexit-sensitive.

Persimmon, Barratt and Taylor Wimpey were among the biggest risers on the main bourse.

Also outshining the index was telecom firm BT with a 1 percent rise after report that Britain's biggest broadband operator was considering a 25 percent workforce cut.

Marring the sentiment was also new worries over the global economy, with benchmark U.S. Treasury yields sinking to 15-month lows and German bond yields falling further below zero.

Struggling department store chain Debenhams, which surged nearly 30 percent to 2.8 pence, below the 5 pence a share possible buyout offer from Mike Ashley's Sports Direct.

"The Sports Direct owner has finally made his move, yet the most closely watched British retail saga in years is unlikely to be concluded smoothly or even quickly," City Index analyst Ken Odeluga said.

Among midcaps, cyber security firm Avast slipped 4.5 percent after a heavily discounted share sale.

Bellway rose 2.2 percent after saying trading in the first six weeks since the start of February has been strong as it reported a rise in first-half earnings and hiked dividend.

Meat packaging firm Hilton Food shed initial gains to drop nearly 3 percent despite reporting higher annual earnings. It added that it believed it was "sufficiently resilient" to withstand the Brexit uncertainties. (Reporting by Muvija M and Yadarisa Shabong in Bengaluru Editing by Keith Weir and Alexandra Hudson)