Two in five London businesses do not have adequate plans for dealing with a terrorist attack on the capital, warned a report, with small businesses the worst prepared for a disaster.

The London Chamber of Commerce, the National Counter Terrorism Security Office and London First released the results of their annual survey of the contingency plans of London firms in the event of fire, a suspected explosive device, a chemical or biological incident or the need to evacuate the premises.

The survey revealed that although a larger number of companies had plans in place, there was a lack of thorough testing of those plans.

It found larger business were more likely perceive themselves as potential targets and put contingency plans in place, whereas smaller businesses did not view themselves a terrorist targets.

The London Chamber said smaller businesses often did not appreciate that their business could be severely disrupted by being located near to a direct target and falling within a cordoned-off zone or subject to wide-spread power failure.

Colin Stanbridge, London Chamber chief executive, said: “In the event of terrorist activity, it is absolutely vital that smaller firms – the lifeblood of the economy – are able to continue trading as normal.

“They therefore need to be much more aware than they are of their massive responsibility both to have and to routinely test contingency plans.”

London First chief executive Jo Valentine, said: “Progress is being made by businesses but there is still a need for more guidance from government to enable the business community to play its part in the counter-terrorism effort.

“The three most frequently cited sources of information on terrorism for businesses are newspapers, television and the police with reliance on the media rising for smaller companies.

“This shows the clear need for businesses to have more comprehensive information directly from an authoritative source to help them remain alert but not alarmed.”