Companies across england were left scrambling to reverse plans to return thousands of staff to their offices on tuesday after the government abandoned its push to get more people working in towns and city centres.

The government has encouraged workers to return to offices since august, ramping up the pressure on businesses to bring back employees after schools returned at the start of september given fears over the damage caused by the coronavirus lockdown to city centre economies.

But just three weeks later, the prime minister announced an abrupt u-turn on the policy following a surge in covid-19 infections, leaving companies frantically rethinking plans for office staff for the rest of the year.

Several major employers of tens of thousands of people in offices around the uk told the financial times on tuesday that they would reassess their plans in line with new government guidance.

Alistair elliott, chairman of property company knight frank, who had been encouraging more staff to return to its head office as the default place of work, said the business would respond and adapt to fit the government advice.

We will do whats right for our people, he said. knight frank has about 340 people back in its head office in london and had been aiming to double that number as it reconfigured its layout to comply with social distancing rules.

Mr elliott said this would mark a great setback to our economy given the momentum that was building in people returning to the workplace.

This will be a real blow to the economy, and that worries me. confidence was building and this could significantly undermine that.

A survey by the ft of some of the largest office employers last week showed that thousands had returned since the start of the month. professional services firms such as ey and allen & overy opened offices this month again for all staff who wanted to return for the first time since the start of the pandemic.

The decision will mean that companies such as insurance broker aon which had been building to 20 per cent of office occupation under the previousguidance will reconsider these plans under the new advice.

Another executive said: we were getting strong armed into putting out positive messages about returning to work and its just been dropped overnight.

Ray berg, managing partner of law firm osborne clarke, said that its plans for a phased return to offices, with up to 25per cent of workers in the office at any one time so far, were now up in the air.

In the city, i felt we were approaching something like critical mass which was enabling restaurants and shops to open. confidence was returning and revenue has been up quite sharply compared to the spring/summer. this feels like a kick in the teeth in some ways but we will follow what the government advises.

The city of london corporation, the municipal authority covering the heart of the capital, had also encouraged companies to return to their offices. passenger numbers on public transport had been steadily increasing, although data showed that in london this appeared to be plateau on monday after a weekend of warnings over the resurgence of the pandemic.

Adam marshall, director-general of the british chambers of commerce, said the latest shift in guidance was extraordinarily reactive and extraordinarily disruptive.

He said that companies were now re-engaging working from home policies and procedures from the spring. at least it will not be as costly or difficult as the last time as many have those plans in place and know that they work. todays volte face will not leave companies impressed.

The decision will be a further blow to already struggling city centres and high streets, which had yet to see a significant recovery in footfall and spending since the previous lockdown in the spring.

The leisure and hospitality sector has been particularly hard hit. on tuesday, whitbread which owns city centre hotels and pub group wetherspoons announced thousands of new job cuts.

Ros morgan, chief executive of the heart of london business alliance, which represents 500 of the biggest businesses in londons west end, said that these measures will further hit businesses in the centre of london. she called on government support for employees affected by the impact on central london footfall, such as those working in hospitality, culture and retail.