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UPDATE 2-UK shares head south as Brexit worries rattle investors; Plus500 sinks

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* FTSE 100 inches up 0.1 pct, European stocks up 0.9 pct

* FTSE 250 erases gains, down 0.2 percent

* Plus500 slumps after profit warning, drags down rival IG

* Debenhams soars on additional funding (Adding details throughout)

Feb 12 (Reuters) - UK shares lagged their euro-zone peers on Tuesday, as growing risks of a disorderly divorce from the European Union rattled investors, while a profit warning from online trading platform Plus500 knocked the midcap index into the red.

The mood soured on the main indices in choppy afternoon trade as Prime Minister Theresa May urged lawmakers to back her Brexit deal and Bank of England Governor Mark Carney warned again of the economic damage if the country leaves the bloc without a deal.

While the speeches did not contain any news, the comments reinforced concerns about the protracted deadlock between Parliament and Brussels.

The FTSE 100, which makes 70 percent of its income overseas, was up 0.1 percent at 1447 GMT, after briefly falling into negative territory as sterling recouped some losses during May's speech.

Some of the biggest losers were companies exposed to the domestic economy, such as pubs, supermarkets, utilities and housebuilders, while gains were in oil majors, miners and multinational banks like HSBC.

The domestically focused FTSE 250 was down 0.2 percent, erasing earlier gains with a plunge in Plus500 shares accounting for almost all the index's 31-point drop.

Optimism across euro zone markets about prospects for U.S.-China trade talks this week and a deal to avoid a U.S. government shutdown did little to help UK stocks, which are less sensitive to the vagaries of trade tensions, traders said.

"The Parliamentary speech and May's sparring with (Opposition Leader Jeremy) Corbyn show nothing's changed," said Mike van Dulken, head of research at Accendo Markets.

"It all comes down to what she can convince Parliament to agree to. She has a tough sell at home and (is) hoping that Europe blinks first."

A disruptive no deal Brexit remained the default outcome.

"There is continued optimism that some sort of a deal will be reached even though we have no concrete reason to believe that is going to be the case," said CMC Markets analyst David Madden.

"Some people are suggesting that May is intentionally running down the clock and trying to coerce some of her MPs into voting for her deal just because it might be better than no-deal," Madden added.

Investors were also bracing for more political turmoil after The Sun reported that May is preparing to resign this summer shortly after delivering Brexit, which could trigger a general election. https://bit.ly/2BwWkzr

Among the biggest individual movers on the day was Plus500, which lost more than a third of its value after the online trading platform blamed a regulatory crackdown for its profit and revenue warning.

The stock was last down 30 percent, on track for its worst day in more than three-and-a-half years, and dragged rival IG Group down 5 percent.

Dragging the FTSE 100 down was tour operator TUI , which has slumped since a profit warning last week, was down 4 percent as its first-quarter underlying loss widened.

Small-cap retailer Debenhams shot up 34 percent after it secured additional funding from lenders as it struggles to find a longer-term solution to its financial woes.

"While this (refinancing) takes away the immediate pressure and provides a short respite, we believe Debenhams is likely to move forward with a CVA (credit valuation adjustment) in order to reduce its lease commitments and store numbers," said John Stevenson, retail analyst at Peel Hunt. (Reporting by Shashwat Awasthi and Tanishaa Nadkar; Additional reporting by Muvija M in Bengaluru; Editing by Josephine Mason and Susan Fenton)