That's despite the gloomiest British summer in living memory, as rain of mythical proportions has meant little sunshine for months.

"The weather has been dreadful but why would you want to go away? We love staying in cottages in the countryside," said David Kitching, who was visiting London for the day with his 13-year-old daughter from Leicestershire, in the midlands of England.

"There's nothing to do when you are abroad but sit by the pool. Here, we've been to farms, National Trust places, Leicester Square, shops, restaurants, and we're going to watch the cricket next week," the warehouse manager added.

British Airways says its latest advertising campaign, "Don't Fly. Support Team GB" is a tongue-in-cheek encouragement for Britons to cheer on their athletes in this summer's London Olympics and Paralympics.

With predicted gridlock in the capital and three hour queues at airport immigration, more people are looking to 'staycation' or 'nearcation' - the idea of vacationing at, or near, your home.

The latest government statistics show visits abroad in the 12 months ending in May 2012 are 1 percent lower than in 2011.

And as Britain wallows in its second recession in four years, cash-strapped holidaymakers are facing rising unemployment and wages that have failed to keep up price rises.

"We have seen a renaissance in domestic tourism since the height of the credit crunch in 2009 and once people realised what Britain had to offer, they wanted to do it again," said Sarah Long, head of corporate communications at VisitEngland.

A historically weak pound, which has lost a quarter of its value against the dollar since a peak in late 2007, has made foreign jaunts more expensive and a government-funded domestic tourism campaign, launched this spring, asked "Why would you want to go abroad?"

"We're going to Norfolk next week, we want to escape and it's nice and quiet," said Phil Mimms outside Britain's 1.45 billion pound Westfield shopping mall, built as a gateway to the Olympic Park and boasting more than 300 shops and 70 eateries.

"Besides, we couldn't afford to go abroad, it's too expensive - especially with four of us," added Mimms, unemployed, who lives in Stratford, home to the Games.

HOME ADVANTAGE

Britons represent some of the most lucrative visitors for euro zone tourist hotspots like Greece and Spain, whose troubled economies are unlikely to be helped by UK holidaymakers staying at home.

But that might give the stagnant British economy an unexpected, if mild, perk.

Tourism contributed 97 billion pounds to the economy in 2011, employing more than 2 million people, and last year saw a record level of expenditure by both foreign and domestic holidaymakers in England.

The government hopes last year's Royal Wedding, coupled with the Olympics and this year's celebrations for Queen Elizabeth's 60th anniversary as monarch, will boost tourism and provide a much-needed lift to the economy.

Those showcase events might be paying off.

London will attract the highest international visitor spend this year, topping MasterCard's Worldwide Index of Global Destination Cities, just ahead of New York as it offers better value for money, the credit card company said last month.

"London is amazing ... but the UK has many more facets than what you see in London," said Sabine Vinck who is on a two-week driving holiday around the country with her sister.

Britain boasts ancient castles, world-leading museums, art galleries, gleaming shopping malls and huge national parks, as well as gastronomic delights from Michelin-starred restaurants to quaint village pubs serving traditional jellied eels.

"We go to Center Parcs, it's outdoors and my son loves it. It's safe and you know what you are getting so we tend to go there most years," said dentist James Meakin.

Center Parcs, which runs four resorts nestled in some of Britain's biggest forests offering activities ranging from badminton to horse riding alongside spa packages, said they did not have any special deals over the Games period but bookings were strong and slightly ahead of this time last year.

Hoteliers in Brighton, a popular seaside resort just an hour from London, are also cashing in on people escaping the capital.

"Brighton has always been a traditional destination for Londoners wanting to leave London. We run at around 96 percent occupancy, of which the lion's share would be domestic people," said Justin Manning, the general manager at The Queens Hotel.

"We've seen spectacular growth in the hotel since the downturn started in 2008, having already been one of the busiest hotels in Brighton we've seen in excess of 20 percent growth," he said.

But not everyone is staying at home.

"It's hard-going moneywise but we want to see more of the world before we get too old and it's nice to get some sun," said semi-retired Jean from Stratford, who has been to Gambia and Croatia in the last year and has just booked to go on a safari. (Editing by Paul Casciato)

• A Permanent Economic Emergency