* FTSEurofirst 300 down 1.6 percent
* Banks the biggest fallers
* S&P revises U.S. outlook to "negative" from "stable"
By Brian Gorman
LONDON, April 18 (Reuters) - European shares hit a three-week low on Monday after S&P cut its credit outlook for the United States to "negative" from "stable", and as euro zone debt worries resurfaced.
At 1342 GMT, the FTSEurofirst 300 index of top European shares was down 1.6 percent at 1,114.01 points, and had hit is lowest since March 24.
Standard & Poor's on Monday downgraded the outlook for the United States to negative, saying it believes there's a risk U.S. policymakers may not reach agreement on how to address the country's long-term fiscal pressures.
"On a day when sentiment is already weak, the downgrade is not helpful, potentially hastening profit taking. The downgrade also serves to remind investors that whilst the core focus continues to be Europe, significant hurdles for the U.S. remain," said Keith Bowman, equity analyst at Hargreaves Lansdown.
Heavyweight banking fallers included Barclays, BBVA, Societe Generale and UniCredit, down between 4.7 and 5.5 percent.
The European banking index fell 2.7 percent, and the Thomson Reuters Peripheral Banking index was down 4.7 percent, with sentiment knocked by a newspaper report that Greece had asked to restructure its debt. The country's finance ministry denied the report.
Investors also worried that Portugal's bailout negotiations might come under pressure after strong electoral gains for an anti-euro party in Finland that has vowed to veto the pending rescue.
"Concerns about the debt situation in the euro zone periphery are far from behind us, and there is a notion that this bull market since mid 2009 has been largely due to central bank inflationary intervention, which is unsustainable in the long run," a London-based equity trader said.
Among individual companies, Swiss medical device maker Synthes rose 7.3 percent after it said it was in merger talks with Johnson & Johnson.
The Dow Jones, S&P 500 and Nasdaq Composite were down between 1.4 and 1.5 percent in early trade. (Additional reporting by Atul Prakash; Editing by Will Waterman)