McDonald's has emerged as potentially the biggest zero-hours employer in the private sector after admitting that it employs 90% of its entire workforce in Britain, or 82,800 staff, on the controversial terms.

Politicians said the UK's largest food chain should offer staff minimum guaranteed hours, while also suggesting that the latest revelation increases the pressure on the business secretary, Vince Cable, to ensure that an ongoing review of the contracts is far-reaching.

Zero-hours contracts have been criticised because they offer no guarantee of regular work and no stability of income.

However, the Institute of Directors, which represents 38,000 directors including several bosses of FTSE 100 companies, attacked calls for a ban, claiming the UK could be in the same situation as Italy or Spain without a flexible labour market.

Andy Sawford, a Labour MP who has campaigned to abolish zero-hours contracts, said: "McDonald's could lead on addressing this issue. There will be some employees working 20 to 30 hours a week, week in week out, and it is indefensible not to put those people on contracts. In the ordering of their food they know how to identify customer levels so they cook the right amount, so they could use that same information with staff levels and give employees more certainty."

McDonald's employs 92,000 staff throughout the UK, running 1,200 restaurants. A spokeswoman said prospective employees are asked during the application process to say which days they can work.

She added: "Many of our employees are parents or students who are looking to fit flexible, paid work around childcare, study and other commitments.

"Employee hours are scheduled in advance and we never ask people to be 'on call'.

"The zero-hours contracts which all our hourly-paid employees are on do not affect employee benefit entitlement and all of our employees are entitled to a range of benefits including life assurance, employee discounts and access to a range of training and qualifications."

She said McDonald's has employed zero-hours contract workers since it entered the UK in 1974.

It has also emerged that a rival fast food franchise, Subway, employs hundreds of staff on zero-hours contracts. The Guardian has seen a contract for staff at one of the largest Subway franchisees, Made To Order, which runs more than 100 Subways in Greater Manchester and Yorkshire.

The contract states: "The company has no duty to provide you with work. Your hours of work are not predetermined and will be notified to you on a weekly basis as soon as is reasonably practicable in advance by your store manager. The company has the right to require you to work varied or extended hours from time to time."

It adds that by signing the contract all non-management staff – or "sandwich artists" – waive their right under working time regulations to work no more than 48 hours a week.

Subway said in a statement: "All Subway stores are independently owned and operated by franchisees. As part of their agreement, franchisees are responsible for all employment matters. Franchisees are required to comply with employment law when recruiting, contracting and in all dealings with employees."

By comparison, sandwich chain Pret A Manger said it does not use zero-hours contracts and that all staff are on a minimum of eight guaranteed hours a week.

The latest revelation has led MPs to call for a broader investigation by the government into the issue since the Guardian first disclosed that retailer Sports Direct employs 90% of its 23,000 staff zero-hours contracts.

Alison McGovern, another Labour MP who has campaigned against the contracts, saidthat the issue is clearly more widespread than first thought. She said: "Every day that goes by and we find out more about how widespread the practice is, the more concern there is and the more there needs to be action. We can't ignore this issue any longer because the calls for change are getting louder and louder. Saying it's fine and we don't need to do anything does not address the issue."

The IoD criticised calls for a change to the rules and said banning the contracts would have extremely damaging results for businesses and employees. It said the flexibility was vital to a strong economy.

Alexander Ehmann, head of regulatory policy at the IoD, said: "Calls to ban zero-hours contracts are deeply misguided and any such action would have extremely damaging results. It would hurt thousands of employees who rely on the flexibility such contracts allow and employers, especially small and medium-sized firms, would struggle to hire the staff they need to meet varying demand.

"Countries with a flexible labour market tend to have lower unemployment and higher employment, and one of the reasons that the UK economy has not gone the way of southern Europe is because employers have been able to adapt swiftly to changing demand."

The IoD employs around 200 staff at its London head office on Pall Mall, with 16 catering and bar staff on zero-hours contracts.

'Staff numbers'

Companies and their staff numbers on zero-hours contracts:

McDonald's 82,800

JD Wetherspoon 24,000

Sports Direct 20,000

Spirit Group 16,000

Boots 4,000

Cineworld All part-time employees

Subway All non-management staff in Yorkshire and Greater Manchester, at least

Tate Catering All part-time employees

Buckingham Palace 350 summer workers