McDonald's has emerged as potentially the biggest zero-hours employer in the UK's private sector after admitting that it employs 90 per cent of its entire workforce in Britain - or 83,000 staff - on the controversial terms.

Politicians said the UK's largest food chain should offer staff minimum guaranteed hours, while also suggesting that the latest revelation raises the pressure on the country's business secretary, Vince Cable, to ensure an ongoing review of the contracts is far-reaching.

Zero-hours contracts have been criticised because they offer no guarantee of regular work and no stability of income.

The London-based Institute of Directors (IoD), however, which represents 38,000 company directors including several heads of FTSE 100 companies, attacked calls for a ban, claiming the UK could be in the same situation as Italy or Spain without a flexible labour market.

Andy Sawford, an MP for the UK's Labour party who has campaigned to abolish zero-hours contracts, said: "McDonald's could lead on addressing this issue. There will be some employees working 20 to 30 hours a week - week in week out - and it is indefensible not to put those people on contracts. In the ordering of their food, they know how to identify customer levels so they cook the right amount, so they could use that same information with staff levels and give employees more certainty."

McDonald's has 92,000 staff throughout the UK and runs 1,200 restaurants. A spokeswoman said prospective employees are asked during the application process to say which days they can work.

"Many of our employees are parents or students who are looking to fit flexible, paid work around childcare, study and other commitments," she said. "Employee hours are scheduled in advance and we never ask people to be 'on call'. The zero-hours contracts which all our hourly-paid employees are on do not affect employee benefit entitlement and all of our employees are entitled to a range of benefits including life assurance, employee discounts and access to a range of training and qualifications."

She added that McDonald's has employed zero-hours contract workers since it entered the UK in 1974.

It has also emerged that a rival fast food franchise, Subway, employs hundreds of its UK staff on zero-hours contracts. According to UK newspaper The Guardian, the contract for staff at one of the largest Subway franchisees, Made To Order, which runs more than 100 Subways in the UK's northern counties of Greater Manchester and Yorkshire, states: "The company has no duty to provide you with work. Your hours of work are not predetermined and will be notified to you on a weekly basis as soon as is reasonably practicable in advance by your store manager. The company has the right to require you to work varied or extended hours from time to time."

Subway said in a statement: "All Subway stores are independently owned and operated by franchisees. As part of their agreement, franchisees are responsible for all employment matters. Franchisees are required to comply with employment law when recruiting, contracting and in all dealings with employees."

The situation has led MPs to call for a broader investigation by the government into the issue, which started after it was recently disclosed that UK retailer Sports Direct employs 90 per cent of its 23,000 staff on zero-hours contracts.

"Every day that goes by, we find out more about how widespread the practice is … and the more there needs to be action," said another Labour MP, Alison McGovern, who has campaigned against the contracts. "We can't ignore this issue any longer because the calls for change are getting louder and louder."

The IoD criticised calls for a change to the rules. "Calls to ban zero-hours contracts are deeply misguided and any such action would have extremely damaging results," said Alexander Ehmann, head of regulatory policy at the IoD. "It would hurt thousands of employees who rely on the flexibility such contracts allow, and employers, especially small and medium-sized firms, would struggle to hire the staff they need to meet varying demand.

"Countries with a flexible labour market tend to have lower unemployment and higher employment, and one of the reasons that the UK economy has not gone the way of southern Europe is because employers have been able to adapt swiftly to changing demand."

The IoD employs around 200 staff at its London head office, with 16 catering and bar staff on zero-hours contracts. Guardian News Service