British businesses are being warned that they could lose their internet connections during the Olympics due to a surge in the number of people going online at key times. The demand could be such that internet companies might be forced to ration access, according to official advice.

The warning, in the Cabinet Office's official advice, Preparing your Business for the Games, says that the country's telecoms system may be unable to cope with demand to access the internet in certain areas. Businesses are being encouraged to offer staff flexible working arrangements to try to ease the pressure.

The document, shared with government departments, states: "It is possible that internet services may be slower during the Games or, in very severe cases, there may be dropouts due to an increased number of people accessing the internet."

The document says that internet service providers "may introduce data caps during peak times to try to spread the loading and give a more equal service to their entire customer base", leading to concerns that major corporations or those in areas of high usage could experience problems.

Experts said the warning was timely and showed that companies needed to examine whether their IT systems would be capable of allowing staff to work from home.

"A lot of businesses have still not prepared for the enormous risks presented by the London Games," said Kathryn Hurt, head of projects for MWB Business Exchange, which provides office space to businesses. "There's been a lot of discussion about traffic hotspots, but very little about potential internet traffic problems. The risk is that home workers are unable to work effectively due to over-capacity."

The government believes that encouraging businesses to allow staff to work from other offices or home, or at different times, is key to easing congestion in the capital this summer.

The Olympic and Paralympic Games are the largest sporting events in the world, with organisers claiming they are equivalent to holding the FA Cup final, Wimbledon tennis championships and London Marathon on the same day. As many as 800,000 spectators and 55,000 athletes, officials, organisers and press are expected to be travelling to and from Olympic venues every day.

The Games organisers predict that on 3 August 2012, the first day of the track and field events, London's public transport will experience an extra three million trips on top of the 12 million made on an average workday.

The Department for Transport (DfT)will launch Operation StepChange, a week-long pilot across Whitehall departments, in which many staff will work from home. Ministers believe the project could result in a "permanent revolution" in which home-working becomes common practice for civil servants, who are expected to use technology such as video conferencing to communicate with colleagues.

However, the initiative is not without its setbacks. The DfT conducted Operation Footfall, a pilot, last August, that resulted in participating staff experiencing internet connection problems, according to those familiar with the project.

"To make sure our plans are robust, we are running a test week," a DfT spokesman said. "This is about encouraging staff to reduce the impact of their travel by either walking or cycling."