The FTSE 100 ended 0.3 percent lower after a choppy day, with investors navigating a commodities selloff and nerves over Brexit as Prime Minister May tried to persuade her cabinet to back her draft EU divorce plan.
"Markets are struggling to discount two binary options: a Brexit which is relatively soft and pushed down the road, or a dramatic no-deal result," said Edward Park, investment director at Brooks Macdonald.
"Whilst a deal remains the market's base case, the threat of a no-deal sword of Damocles hangs over UK assets until the start of 2019 at the earliest," he added.
Miners and oil majors dragged the FTSE down the most, while Debenhams stole the spotlight in the small-cap space with its worst ever day.
Commodities-related sectors were hit by worries over slowing global growth and excess supply of crude oil.
Rio Tinto, BHP Billiton, and Evraz fell 2.4 to 3.5 percent as metals slipped on weak China retail sales data.
Glencore, Anglo American, and Antofagasta fell around 1 percent.
Oil majors BP and Shell also declined after crude prices plunged 7 percent on Tuesday. Oil rebounded slightly on Wednesday but not enough to drive the stocks up.
Gambling companies Paddy Power Betfair and GVC were among top gainers, up 6 and 5.6 percent, after the UK government brought forward its gambling regulation reform.
The reform of gambling machines considered highly addictive, called fixed-odds betting terminals (FOBT), will now be implemented in April, and analysts expect the statutory instrument to be enacted next week.
This boosted shares in GVC, which was liable to pay out around 670 million pounds to former Ladbrokes shareholders if the reform had not been enacted by March 28, 2019.
The certainty also drove a relief rally across the sector whose share prices have been pressured by regulatory fears. William Hill, 888 Holdings and JPJ Group all climbed on the news.
Debenhams shares sank 21 percent, their biggest ever one-day fall, after a Drapers report said some high street suppliers have stopped working with the department store chain.
Back on the FTSE 100, Micro Focus topped the index with a 5.7 percent gain after Goldman Sachs upgraded it to "buy". The company also said it had bought back 213,400 of its shares as part of a $400 million buyback programme.
Smiths Group was also up 5.2 percent after the British engineer said it planned to spin off its healthcare business.
Overall, analysts have been downgrading their expectations for UK earnings this results season, and investors say company reports show evidence of growing margin pressure and strain from preparations for Brexit.
"The UK earnings season has again shown the precarious state of the UK retail market which has struggled to pass on cost pressures to consumers," said Brooks Macdonald's Park.
"Exporters who are wrestling with the practicalities of European distribution in the event of a no deal have delayed investment and this has contributed to suppressed earnings expectations for 2019," he added.