LONDON, Dec 27 (Reuters) - Fresh concerns that the United States may fail to reach a deal to avoid growth-sapping fiscal measures weighed on European shares on Thursday, pushing a key index down from its highs.
The pan-European FTSEurofirst 300 index provisionally closed broadly flat at 1,137.30 points, although the euro zone's blue-chip Euro STOXX 50 index edged up by 0.4 percent to 2,658.30 points.
Traders remained focused on progress by U.S. politicians to avoid a "fiscal cliff" - a combination of government spending cuts and tax rises due to take effect early next year which could hit the U.S. economy.
The FTSEurofirst 300 fell from an intraday high of 1,141.79 points after the U.S. Senate Majority Leader Harry Reid warned that the country could go over the edge of the "cliff", although most traders still felt an agreement would eventually be struck.
"Clients are a little bit nervous. We may get a further pullback going forward but the general outlook is still positive. The general expectation is that when push comes to shove, they'll reach an agreement," said Giles Watts, head of dealing at City Index.