Banks lead Europe shares lower in choppy trade

* FTSEurofirst 300 down in volatile morning trade

* Banks slide on talk of bigger funding needs

* Oil & gas top weighted gainer as crude prices recover

* Eyes on central banks to follow Australia rate cut

By Peter Starck

FRANKFURT, Oct 7 (Reuters) - European shares fell to a near four-year low in choppy trade early on Tuesday as financials, led by Royal Bank of Scotland (RBS.L: Quote, Profile, Research) and Deutsche Bank (DBKGn.DE: Quote, Profile, Research), tumbled on talk of bigger funding needs amid the swirling global credit crisis.

At 0928 GMT, the FTSEurofirst 300 index of leading European shares was down 0.5 percent at 1,000.26 points, having rallied as much as 2.6 percent in early trading in a short-lived rebound to its record 7.8-percent-drop on Monday.

The benchmark then fell 0.9 percent to its lowest level since Oct. 27, 2004.