Slump in Weir leads UK's FTSE down from record high

* FTSE 100 down 0.2 pct after Tuesday's record high

* Weir Group falls sharply after revenue warning

* Whitbread (LSE: WTB.L - news) gains on encouraging outlook (Updates with closing prices)

By Atul Prakash and Alistair Smout

LONDON, Feb 25 (Reuters) - Britain's top share index retreated from the previous session's record high on Wednesday, with engineer Weir Group leading the market lower after warning about a significant drop in its revenue in the current year.

Weir Group, which makes valves and pumps for the energy and mining industries, fell 8.7 percent to the bottom of the blue-chip FTSE 100 index after saying uncertainty in the oil and gas industry would significantly reduce its revenue despite cost-cutting.

"People have been talking about inevitable cutbacks in oil exploration for quite along time, and you would have thought that those companies with exposure to the sector would have already been on investor radar screens," Jeremy Batstone-Carr, market analyst at Charles Stanley (LSE: CAY.L - news) , said.

"Given that, it's surprising that there's been such a sharp reaction to Weir's outlook statement."

The blue-chip FTSE 100 index closed down 14.25 points, or 0.2 percent at 6,935.38 points after setting a new record high of 6,958.89 points on Tuesday. That surpassed its previous high of 6,950.60 set on Dec (Shanghai: 600875.SS - news) . 30, 1999.

Among other sharp movers, mid-cap AO World slumped 31.7 percent after the British online domestic appliances retailer cut its full-year earnings outlook as the boost around the company's flotation faded.

On the positive side, Whitbread rose 2.7 percent after saying it expected to post full-year profit toward the top end of market forecasts, as strong demand at its Premier Inn hotels and Costa Coffee chain helped deliver a 5.8 percent rise in fourth-quarter underlying sales.

"Investors will have few complaints on a growth stock where the share price has risen 22 percent over the last year. Despite this rapid appreciation, the market remains committed to the story with the consensus still coming in as a comfortable buy," Richard Hunter, head of equities at Hargreaves Lansdown (LSE: HL.L - news) Stockbrokers, said.

St James's Place was also in demand, with its shares rising 4.3 percent to the top of the FTSE 100's gainers list after it posted forecast-beating full-year cash profits, boosted by a rise in assets that underpinned a surprise increase in the firm's final dividend. (Editing by Jeremy Gaunt)