The UK mining index <.FTNMX1770> rose 0.8 percent to feature among the top sectoral gainers after copper prices rose 1.5 percent and nickel advanced 1.7 percent following recent declines. Miners Rio Tinto (>> Rio Tinto plc), BHP Billiton (>> BHP Billiton plc) and Anglo American (>> Anglo American plc) rose 0.4 to 2.3 percent.

The blue-chip FTSE 100 index <.FTSE>, which climbed to its highest level since mid-September on Tuesday, closed 0.2 percent higher at 6,825.94 points.

However, some analysts remained cautious.

"I can't buy enthusiastically at these levels, with worries over the Greek economy still an issue, but I am cautiously optimistic," said Berkeley Futures' associate director Richard Griffiths.

Athens' ATG share index <.ATG> fell more than 9 percent and the Greek banking index <.FTATBNK> skidded 27 percent, hitting a record low, as investors feared the new government's anti-austerity stance would make negotiations with the euro zone on a new aid deal difficult.

Among individual stocks, brewer SABMiller (>> SABMiller plc) rose 4.6 percent, the top gainer in the FTSE 100 index, with traders saying the stock had become attractive on valuation grounds following its recent underperformance against its peers. SABMiller has risen 3.4 percent this month, against a 11 percent gain for the European food and beverages index <.SX3P>.

However, gains were capped by sharp falls in other stocks.

Morrisons fell 6.2 percent, the biggest decline in the FTSE 100 index <.FTSE>, with traders citing a Bernstein note as the main reason for the stock's weakness.

Bruno Monteyne, senior analyst at Bernstein, said: "The accelerated change in chairman and the search for a new CEO confirm in our view that more rapid execution is needed, that the dividend will be cut for the next few years and that margins will struggle to recover in the next few years."

Energy stocks also fell, with the UK Oil and Gas index <.FTNMX0530> down 1.8 percent, as oil prices slipped 1.4 percent after U.S. crude stocks soared to the highest on record last week.

Technology group ARM (>> ARM Holdings plc) rose 1.7 percent, boosted by Apple's (>> Apple Inc.) record profits. ARM, whose chip designs are used in nearly all of the world's mobile phones, was lifted after Apple's quarterly results smashed Wall Street expectations with record sales of big-screen iPhones in the holiday shopping season.

(Additional reporting by Tricia Wright and Sudip Kar-Gupta; Editing by Angus MacSwan)

By Atul Prakash