By Michael Taylor

LONDON (Reuters) - The FTSE 100 fell 5.5 percent on Monday, suffering its largest one-day loss since September 11, 2001 as the index tracked global markets lower on deepening fears of a possible U.S. recession.

The FTSE 100 .FTSE closed down 323.5 points at 5,578.2, its lowest close since June 2006 and wiping nearly 77 billion pounds from the value of its constituent stocks.

The blue-chip index has now lost more than 13 percent since the start of the year.

"Very nervous," said Jawaid Afsar, a trader at Securequity on the current equity climate. "It is very, very nerve-racking. It's very frightening and people are just concerned (over) recession fears, credit fears ... Writedowns and all the rest of it are just part of the same sort of thing at the moment."

Last week President George W. Bush called for a package of tax cuts and other measures of around $140 billion to $150 billion (72 to 77 billion pounds) to shore up the U.S. economy, battered by the subprime mortgage crisis and subsequent credit crunch.

But widespread doubts over the effectiveness of such action sent U.S. stocks reeling on Friday to close out the worst week for the S&P 500 in five years, while Tokyo's Nikkei shed 3.9 percent on Thursday.

U.S. markets are closed on Monday for Martin Luther King Day.

"We are (already in a U.S. recession)," added Afsar. "Up until last week I was thinking we might escape, but when those consumer figures came out on Friday, they clearly did show there was some concerns lingering and it was hurting the broad economy across the range.