France's Cac 40 fell 0.56 per cent, while the FTSE 100 - which on Friday hit 7,000 points for the first time - fell back 0.27 per cent. The euro edged closer to parity with the dollar, with the US currency rising 0.19 per cent so one euro is now $0.9260.
Last weekend Tsipras wrote to Merkel warning it will be "impossible" for Greece to pay its debts without help from the EU.
Merkel has come under pressure from her colleagues to take a tough line on Greece's austerity plans, while EU neighbours - including Spain - have made clear that reforms previously agreed should be carried out. Tsipras, whose left-wing Syriza party was elected in January, has repeatedly refused to extend measures agreed by the previous government and its lenders. He was controversially quoted saying: "Forget the commitment of the previous government."
Volker Kauder, the parliamentary leader of Merkel's CDU party, told German newspaper Handelsblatt on Sunday that "we are not thinking of any other programme".
The growing rift between the two sides increases the chances of a so-called Grexit, although Merkel told the German Reichstag last week that "if the euro fails, then Europe fails", suggesting she is keen to avoid any Greek exit from the euro.
To add to pressure on Merkel, Tsipras has brought forward a meeting with Vladimir Putin, suggesting he could turn to Russia if Europe isn't forthcoming with the money Greece needs to service its €172bn bailout loans.