Shaftesbury (SHB.L), which owns 330 shops and 217 restaurants, bars and cafes across areas like Chinatown, Covent Garden and Soho, in a neighbourhood also home to London's "theatreland", said warnings of disruption to road and tube services would convince many locals to stay at home.

"For weeks we've had stories of where to avoid, which potentially puts up a barrier in people's minds that parts of London are no-go zones," chief executive Brian Bickell told Reuters on Thursday. "People won't go to the theatre if they are worried about getting back home afterwards."

As part of preparations for the Games, which begin on Friday, organisers have blocked off road lanes for the exclusive use of athletes and officials and set traffic lights to stay red for longer, which has already caused traffic nightmares.

Dubbed "Zil" lanes after Soviet roads reserved for black limousines carrying senior Communist party members, the designated lanes were introduced after athletes became stranded in traffic jams at the 1996 Atlanta Olympics.

Organisers have also warned of long queues at tube stations during busy periods, putting the city's creaking transport network under further strain.

Bickell said the Games would help raise the already-high profile of London whatever the short-term effects, and that was a good thing.

"The next two weeks will be a very unusual time for the West End. Longer term it's a fantastic opportunity for London and the best travel advert possible." (Editing by Sonya Hepinstall)

• A Permanent Economic Emergency