Updated

LONDON (Reuters) - London's crowded transport system is one of the biggest risks to the smooth running of the 2012 Olympics, local politicians said Friday.

"In 2012 London is facing extreme demand placed on a network already creaking at the seams," said Val Shawcross, chair of the London Assembly's transport committee.

"This is not just about spectators and visitors being able to get to and from events, Londoners will need to go about their everyday business too."

London's entire transport system is likely to come under strain during the two weeks of sport, with about 5.3 million people visiting the Games, the committee said in a report.

The busiest days are likely to see more than one million Olympic-related journeys on public transport.

It would not be easy to absorb the extra demand because the network already operates near to capacity, the committee said.

The Olympic Delivery Authority, responsible for getting the Games' infrastructure ready on time, estimates that a third of Londoners may need to change their travel habits during the event.

Businesses have been urged to ask staff to work from home or change their working hours, while some have been encouraged to take a holiday.

The city's overcrowded roads and underground network have been a constant worry for Olympic authorities.

Nearly 30 planned improvements to the transport infrastructure have been made since the London won the bid in 2005, but it still remains an "enormous challenge," the committee said.

Some 90 km (55 miles) of roads in the capital will have restricted "Games lanes," barred to other motorists, which will speed athletes, sponsors, dignitaries, officials and the media to Olympic venues.

But the committee said it was concerned that many drivers would be unaware of the restrictions and unwittingly incur fines of 200 pounds ($325) for straying into the lanes.

Only five percent of spectators are forecast to walk and cycle despite plans to extend the capital's cycle hire scheme to the edge of the Olympic Park in east London.

(Reporting by Avril Ormsby; editing by Tim Castle)