By Amanda Cooper

LONDON (Reuters) - European shares were on track for a third successive decline by midday on Friday as a sell-off in banks gathered pace, while a dip in the gold price dented miners and energy stocks surrendered early gains.

Shares in UBS fell 4.3 percent, Royal Bank of Scotland lost 3.5 percent and ING Groep lost 2.5 percent, which took the bank sector's collective net negative contribution to the decline in FTSEurofirst to -3 points from -0.4 points at 1006 GMT.

A jump in one-week interbank lending rates put further pressure on the equities market, highlighting once again that the problems in the credit markets are far from over.

The FTSEurofirst 300 index of top European shares was last down 0.47 percent at 1,238.78 points by 11:50 a.m., off for a third day in a row.

Among the key issues for equity investors has been the spiralling cost of fuel and food that has prompted central bankers this week to reiterate their intention to tackle inflation even at the expense of economic growth.

"Clearly the threat of inflation has been growing in central bankers' and in investors' minds over the last few trading sessions and again, that said, it's easy to understand why some short-term optimism has dissipated," said Henk Potts, an investment strategist at Barclays Stockbrokers.

"We've had a dramatic turnaround in the course of the last couple of weeks in terms of market expectations of where interest rates are likely to go and the ability of central banks to use cuts in rates to try to reduce the impact of the (economic) slowdown that is anticipated."

Barclays fell by more than 2.5 percent, reversing an early rise after sources familiar with the matter said on Friday Sumitomo Mitsui Financial Group was considering investing about 100 billion yen ($962 million) in the bank.