Britain cannot afford a full team at the first Olympics on home soil for more than half a century unless officials raise another £4 million, it emerged last night.

The potential downsizing of the ambition to field 550 competitors in London comes as the BOA assesses the cost of the 2012 set-up amid a recession. It is thought that the BOA, which last year made a pre-tax loss of £1.5 million, is £4 million short of the amount needed to fulfil its plan.

With half of the required £8 million budget, it could fund about 350 athletes. This would still be more than the 311 athletes who travelled to Beijing last year, but would represent a failure to take advantage of all the places available to the host nation.

The cost of fielding a team on home soil will not necessarily be cheaper for the BOA because different sports will be spread out across the country before the Games, some even at training camps on the Continent. Others may have to be flown back to London from international competitions. The backroom support for the team will also be more extensive than at previous Olympics, reflecting the pressure to perform in front of a home crowd after record public investment in elite sport.

“There are as many disadvantages being at home as advantages,” Andy Hunt, the BOA chief executive, said. “It is far more complex not taking the team away to one location. If you have 550 athletes, you probably have 1,100 in the team including officials and the cost of kitting out 1,100 people is enormous.”

The BOA said that yesterday’s meeting of national governing bodies, where it outlined a range of budget scenarios, was just the start of the process and that no decision had been made about the size of the team.

“We would like to have the broadest, most competitive team across all the sports we can, but we need to figure out what the cost is of doing so,” Hunt said.

Densign White, the British Judo Association chairman, said that Britain should field the largest team possible. “We do not want to bankrupt ourselves but as this is a home Olympics, it is a once-in-a-lifetime opportunity,” he said. “If we are talking about £4 million, that represents the annual salary of just one Premier League footballer and in the greater scheme of things, that’s not much to find.”