International Olympic Committee (IOC) chief Thomas Bach says the Tokyo Games would have to be scrapped if the event cannot be held next year due to the Covid-19 crisis.
In March, the IOC and Japanese government took the unprecedented decision to delay the Games, which had been due to start in July, for a year due to the novel coronavirus outbreak.
However, Japanese Prime Minister Shinzo Abe has said the multi-sports event cannot take place in 2021 unless the virus is contained and Bach said he understood his position.
The novel coronavirus has infected more than 17,100 people in Japan, causing 797 deaths.
"Quite frankly, I have some understanding for this, because you can't forever employ 3,000 or 5,000 people in an Organising Committee," Bach told the BBC.
"You can't every year change the entire sports schedule worldwide of all the major federations. You can't have the athletes being in uncertainty."
Bach said the IOC was committed to holding the Games next year though it had to be prepared for various scenarios including quarantining athletes.
"What could this mean for the life in an Olympic Village?" he said.
"All these different scenarios are under consideration and this is why I'm saying it's a mammoth task, because there are so many different options that it's not easy to address them (now).
"When we have a clear view on how the world will look on July 23, 2021, then (we will) take the appropriate decisions."