Significant pressure on networks are expected for the duration of the Games.
British firms could see their internet connections rationed during the London 2012 Olympics due to the unprecedented strain on networks the Games will bring about.
The warning comes in official advice from the Cabinet Office on business preparation over the Games.
Some 800,000 people are expected to travel to the venues each day, putting additional pressure on the internet.
"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 guidance reads.
Service providers may implement data caps over peak times to ration connections.
Companies relying on the internet for their day-to-day operations will need to think about the strategies they have in place to cope in the event of internet outages or caps.
Businesses are being encouraged to offer staff flexible working arrangements to try to ease the strain.
They could also think about archive document storage and backing up files as part of their business continuity plans.
Having offsite backup will ensure that any documents or data lost in the event of the internet going down will be protected.
Research by Deloitte found just one in five companies intend to review their business continuity plans before the Games – despite most expecting a massive increase in demand for their goods and services.
Kathryn Hurt, head of projects for MWB Business Exchange, told the Guardian: "A lot of businesses have still not prepared for the enormous risks presented by the London Games.
"There’s been a lot of discussion about traffic hotspots, but very little about potential internet traffic problems. The risk is that homeworkers are unable to work effectively due to over-capacity."
Recently, the Department for Transport launched a week-long flexible working initiative across Whitehall to test civil servants’ ability to work from home during the Olympics.