* FTSEurofirst 300 down 0.7 pct on day, up 16 pct in Q1
* DAX records best Q1 gain since creation in 1988
* About 665 bln euros in market value created in Q1
PARIS, March 31 (Reuters) - European shares slipped on Tuesday after their recent sharp rally but retained big gains for the quarter, with Germany's DAX posting its strongest first-quarter performance since its creation in 1988.
The DAX has surged 22 percent in the last three months, while the FTSEurofirst 300 index of top European shares climbed 16 percent, boosted by the European Central Bank's asset-buying scheme which has helped weaken the euro currency.
Shares in the euro zone have seen the bulk of the gains, climbing 18 percent overall, a rise of about 665 billion euros ($710 billion) in market value over the past three months, data from Thomson Reuters Datastream shows.
That is more than half the size of the ECB's quantitative easing programme, launched this month.
The central prediction from around 50 fund managers and strategists polled by Reuters in the past week was for the pan-European STOXX Europe 600 index to rise more than 6 percent from current levels to 425 points by the end of 2015.
The euro weakened in the run-up to the launch of the ECB scheme this month, as the U.S. Federal Reserve moves closer to raising interest rates.
"The question is whether being a late starter has left the ECB and Europe too far behind and too close to deflation. The next two quarters will be key to understanding if Europe can scrape past and start to accelerate," said Lorne Baring, managing director, B Capital Wealth Management in Geneva.
The FTSEurofirst 300 index of top European shares ended 0.7 percent lower, at 1,585.09 points.
Investors were booking profits on auto stocks, the sector which has risen the most since the start of the year. BMW fell 1.3 percent, and Renault dipped 1.5 percent. Despite the day's losses, the sector is still up 32 percent in the quarter.
UK's FTSE 100 index fell 1.7 percent, dragged lower by energy shares such as BP and Royal Dutch Shell , both down 2.1 percent, as oil prices sank again.
Bank of Ireland fell 7.8 percent after Canada's Fairfax Financial Holdings sold a 2.9 percent stake in the bank.
Both Germany's DAX index and France's CAC 40 ended down 1 percent, as investors booked recent gains.
"Markets are ending the strongest quarter in years," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets, in Brussels.
"As of tomorrow, we may be in a different world. Markets are very 'overbought' and will be looking for a reason to correct or consolidate," he said.
Europe bourses in 2015: link.reuters.com/pap87v
Asset performance in 2015: link.reuters.com/gap87v
Today's European research round-up
(Additional reporting by Atul Prakash in London; Editing by Ruth Pitchford; Editing by Alison Williams)