The Cabinet Office had previously told businesses to prepare counter measures in case internet service providers (ISPs) introduced download limits or even experienced failures. However, it said it now believes efforts to address extra demand has offset these risks. Business groups have welcomed the news.
The Cabinet Office's Preparing Your Business For The Games report, issued in February said: "In very severe cases there may be drop-outs due to an increased number of people accessing the internet. In addition, ISPs may introduce data caps during peak times to try and spread the loading and give a more equal service to their entire customer base."
It promised at the time to provide an update before the opening ceremony on 27 July. A spokesman told the BBC that officials now believed steps by broadband and mobile network operators to increase capacity had eased fears. "The situation has moved on considerably since the advice for businesses was published," he said.
"We do not now believe there is likely to be any impact on the UK internet infrastructure during the Olympic Games. "We are still advising companies to speak to their internet service providers about the internet capacity within their buildings. "If a significant number of employees were to watch the live streaming of an event, it could significantly slow a company's network speed if there is not enough network capacity available."
Telecoms group BT noted the work it had done with other ISPs to prepare for the event.
"We have done a huge amount of capacity planning work, which has included reviewing and learning from events like the World Cup, royal wedding and America's Super Bowl," said a spokesman.
"As a result we've built a capacity model for our core broadband networks and we've brought forward investment and capacity increases to meet the anticipated extra demand. "On top of the extra planning and investment, we've also installed more than 475,000 wi-fi hotspots in Greater London."
The Federation of Small Businesses welcomed the Cabinet Office's update, but called for further action. "For a small firm dependent on the internet for running their business, download limits or failures during the Games would have been disastrous," said the FSB's national chairman John Walker.
"However, a recent survey of more than 3,000 members shows that 48% of businesses in urban areas are dissatisfied with their broadband speed, rising to 63% for those in the countryside.
"So whilst a problem regarding the Olympics may have been dealt with, for an effective economic recovery we still need to see faster roll-out of superfast broadband throughout the country - especially in rural areas."
Is your business ready? Are you ready? Speak to a member of our sales team for the best advice and product knowledge to help you prepare for the London 2012 Olympics. 01908 760 795 (Mon - Fri 9am to 5:30pm)