* Banks under pressure; Dubai worries hit sentiment

* Miners fall back as commodity prices retreat

* Water companies rally after Ofwat pricing news

By Tricia Wright

LONDON, Nov 26 (Reuters) - Britain's top share index fell sharply on Thursday, giving back the previous session's gains, weighed by weakness in banks on concerns over possible Dubai exposure, and with miners hit by a fall in metals prices.

At 0931 GMT, the FTSE 100 .FTSE was off 88.69 points, or 1.7 percent, at 5,276.12, after closing 0.8 percent higher on Wednesday.

"The Dubai debt debacle and the uncertainty that it has created as a result of the Kingdom's forthcoming holiday has had a severe knock-on effect on equity markets, as well as throwing the bond market into turmoil," said David Buik, senior partner at BGC Partners.

The FTSE 100 index has surged about 53 percent from a six-year low hit in March, though it is still 2.6 percent below its level of mid-September 2008 before the collapse of Lehman Brothers.