Copper slumped to a 14-month low on Monday, adding to sharp falls from the last three weeks, as fears of a Greek debt default and the threat of a global recession sparked heightened concerns about demand for industrial metals.

Three-month copper on the London Stock Exchange (LME) fell more than 7 percent to $6,800 a tonne, its lowest level since late-July 2010 and its sharpest fall since October 2008 before trimming losses to trade at $7,125.75 by 0950 GMT. Other base metals also tracked falls in copper, with benchmark aluminium , zinc and lead all tumbling to their lowest levels in more than a year.

The leading indicators are worsening so the outlook for demand is worsening. We've seen lack of demand in Europe and the U.S. and we are likely to see lower demand growth in China. This is reflected in the prices but the question is to what extent, said Eugen Weinberg, analyst at Commerzbank.

Falls in recent weeks have pushed copper down 23.1 percent so far this month, on track for its second consecutive monthly fall. The metal is trading 25 percent lower in the year to date.

Analysts expect to see some bargain-hunting following the metal's recent falls, but Chinese buyers are likely to be cautious given recent market volatility, with investors also expected to sit on the sidelines ahead of a week-long national holiday in China next week.

There will be some buying over the next weeks but right now considering the national holidays at the beginning of October, I think any buying will be very cautious, Weinberg said.

The most-active December copper contract on the Shanghai Futures Exchange halted trading after diving 7 percent against its previous day's settlement price to 53,320 yuan ($8,345.725) per tonne, the lowest since July 21, 2010.

European equities erased earlier falls to trade higher, while the dollar slipped against a basket of currencies, reflecting some easing in risk aversion A weak dollar is supportive for metals as it makes commodities priced in the U.S. unit cheaper for holders of other currencies.

MULTI-MONTH LOWS

Following criticism from the U.S., China and other countries, European policymakers began working on new ways to stop the fallout from Greece's near-bankruptcy from inflicting more damage on the world economy as they try to convince markets that a credible plan for the crisis is in the works.

We await more details, and possibly dissenting views, to come out over coming days with Germany the key area to watch, ANZ analysts said in a note.

Fears over the effect from a potential default from Greece, especially on the banking sector, as well as worries over a U.S. economic slowdown have raised the spectre of a repeat of the market turmoil which followed the Lehman Brothers' collapse in 2008. Uncertainty about the outlook for demand for industrial metals prompted sharp falls across the base metal complex.

Three-month aluminium earlier fell to its lowest level since mid-September 2010 before recovering to trade at $2,205.75 a tonne from Friday's close of $2,206 a tonne. Zinc fell to its lowest since mid July last year, but later pared losses to trade at $1,880 from a close of $1,915 a tonne on Friday.

Lead, which also slipped to its lowest since mid-July 2010, later traded at $1,927 from $1,955. Tin fell to $20,100 a tonne from $20,200, hovering near its lowest level since July 2010 hit on Friday, while nickel slipped to $17,899 from $18,270, hovering near its lowest level since December 2009 hit on Friday.

London stock exchange Copper China Commerzbank