New all-time low for Glencore drags UK stocks lower

* FTSE falls 1.4 percent

* Glencore (Xetra: A1JAGV - news) worst 1-day drop ever as debt fears grow

* Mining index touches lowest level since Dec (Shanghai: 600875.SS - news) . 2008

* Vodafone down after end to Liberty Global (NasdaqGS: LBTYA - news) talks (Adds detail and quote, updates prices)

By Kit Rees and Lionel Laurent

LONDON, Sept 28 (Reuters) - British shares fell on Monday, slightly underperforming the broader European market, hit by new fears over miner Glencore's ability to withstand a metals price slump, and an end to deal talks at Vodafone.

The UK market is relatively exposed to mining and commodities stocks, which have been in the firing line amid an emerging-markets slowdown.

Glencore slumped more than 21 percent to a new all-time low after a bearish note from broker Investec (LSE: INVP.L - news) that raised doubts over the mining and commodities company's valuation and high debt levels. The stock was set for its worst one-day drop ever.

"One cannot deny the fact that investors are - if the share price is telling you anything - extremely concerned about the near-term outlook," Jeremy Batstone-Carr, market analyst at Charles Stanley (LSE: CAY.L - news) , said.

The broader FTSE 350 mining index fell 7.2 percent, hitting its lowest level since Dec. 2008, weighed down by miners Anglo American (LSE: AAL.L - news) , down almost 8 percent, and Rio Tinto, BHP Billiton (NYSE: BBL - news) and Antofagasta (Other OTC: ANFGF - news) all trading down more than 3.5 percent.

The outlook for China's economy was also a drag, with forecasts pointing to a likely shrinking of the country's giant factory sector for the second month in a row. Profits earned by Chinese industrial companies declined at the sharpest rate in four years in August, according to official data.

"It (Other OTC: ITGL - news) may be too soon to believe a bottom is in (for commodity prices)," said Brenda Kelly, analyst at London Capital Group.

The FTSE 100 index was down 1.4 percent, at 6,021.24 points at 1105 GMT, a touch lower than European indexes.

On the deal-making front, Vodafone took a hit from news that tie-up talks between the network operator and Liberty Global had collapsed because they could not agree on the value of their businesses. Vodafone shares were down 3.7 percent, its lowest level in 10 months.

However, brewer SABMiller (Xetra: BRW1.DE - news) fared better, with shares touching fresh six-month highs, up 2.8 percent, after a report in the Sunday Times that Anheuser-Busch could bid about $106 billion for the company.

"News (Other OTC: NWSAL - news) of the proposed takeover of SABMiller...has put M&A (mergers and acquisitions) firmly in the spotlight," HSBC strategists wrote in a note to clients. "We believe (companies) will increasingly choose to buy (rivals) because the macro is so uncertain." (Reporting by Lionel Laurent; Editing by Toby Chopra and Susan Thomas)