The chief executive of G4S has come under increasing pressure to resign before he prepares to appear before the Commons Home Affairs Committee on Tuesday.
Nick Buckles had already admitted he may be forced to quit his £830,000-a-year job after it was revealed that troops will have to be drafted in to secure the games. The possibility of Buckles stepping down looked even more likely on Monday night with news that the company’s share price had dropped by almost 9%.
It was also revealed on Monday that officers from nine police forces were to be drafted in to help the 3,500 service people already asked to work at the event.
The blunder is expected to leave the firm with a loss of up to £50m on the high-profile contract. G4S has already seen more than £400m wiped off its market value since it announced that it would not be able to fulfil its contractual obligations to provide staff for the Olympics.
G4S repeatedly told ministers that it would "overshoot" its targets for recruiting security guards, Theresa May said on Monday.
The home secretary told MPs that G4S only told the government that they would be unable to meet their contractual arrangements last Wednesday.
"G4S repeatedly assured us they were going to overshoot their target not undershoot it," May said.
However she said G4S had not "deliberately deceived" the government as the company itself had only discovered it had a problem "over the last couple of weeks".
And she dismissed as "untrue" allegations that ministers had known about the shortfall as long ago as 2011.
A total of 3,500 troops, many of whom will be billeted at Tobacco Dock near Wapping, east London, were brought in to boost the number of servicemen and women involved in Games security to 17,000 last week.
Hundreds of officers from nine forces have now also been drafted in to fill gaps.
Venue security was being tightened "before the full complement of accredited staff have been assigned", a G4S spokesman said.
"This situation is being rectified over the coming days, which should lead to the withdrawal of police officers from those roles assigned to private security."
The forces involved are Dorset, Surrey, Hertfordshire, Northumbria, South Wales, Strathclyde, West Midlands, Thames Valley and Greater Manchester.
Assistant Commissioner Chris Allison, the national Olympics security co-ordinator, said: "Whilst some of the activity police officers are undertaking was not anticipated, plans were put in place to allow us to do this.
"Forces are making sure they make the best use of their resources locally to do all they can to minimise the impact on local policing."
But West Midlands Police Federation chairman Ian Edwards said it was "chaos, absolute chaos".
The force has had to provide 150 officers per day to cover a hotel in Warwickshire where footballers are staying, he said.
"The worst-case scenario is that we end up having to find another 200 officers for the security at the City of Coventry stadium, and we've yet to find out what the shortfall is in Birmingham. It's chaos, absolute chaos.
"You shouldn't lose your local police officer because of the Olympics. Communities are suffering because a private company has failed to deliver on a contract."
Clive Chamberlain, chairman of Dorset Police Federation, added G4S staff were simply not turning up.
He said: "On a daily basis it's a lottery as to how many staff are going to turn up. The best they've managed is 15% not turning up, and on the worst occasions they have been 59% down. It's a fiasco, it's an absolute debacle.
"My biggest fear is that G4S are now panic-recruiting people to get as many people as they can into the organisation. Two weeks before the Games, we are going to have hundreds or thousands of people that are going to need to be properly vetted, that comes down to the police.
"What proper training will they have had before they start? It's very, very worrying."
Paul Murphy, the chairman of Greater Manchester Police Authority, said that officers had arrived at the Worsley hotel on Saturday night planning to conduct a "lock-down" of the building to carry out a thorough security check before the arrival of Olympic athletes this week.
Instead of the 58 security staff which G4S had recommended, the company had supplied only 20, he said.
Mr Murphy told BBC Radio 4's PM: "That had a major impact on the ability to lock down that site and Greater Manchester Police had to step in and ensure that the site was properly locked down."
He added: "We have had to use officers and staff on rest days. We have had 28 Pcs and four Sergeants into that area, at a cost of £30,000 a day.
"The Home Office will bear that cost. The people of Greater Manchester won't bear that alone."
Mr Murphy said he was "very confident" that athletes visiting the city will be safe and secure during the Olympics.
But he added: "I am concerned about using officers' rest days to fill this gap. I have got a health and safety consideration. I have got a duty of care to those officers."
Mr Allison said: "Eight venue forces have now deployed police officers to support security regimes at venues in their areas.
"Whilst some of the activity police officers are undertaking was not anticipated, plans were put in place to allow us to do this.
Forces are making sure they make the best use of their resources locally to do all they can to minimise the impact on local policing.
"Delivering a safe and secure Games is a priority, but we will not compromise on keeping our local communities safe.
"We will continue to work closely with all our partners to get the job done, and these current deployments will be kept under constant review.
"At the present time this is not impacting upon our existing plans for the safety and security operation."
The recriminations over G4S' handling over Olympic security as the first Olympic athletes arrived at Heathrow on Monday, with the airport expecting to handle a record number of passengers.
A total of 335 athletes are expected today as well as 236,955 passengers, breaking the previous record of 233,562 set on 31 July 2011.