LAN becomes slow if internet is down

Sir,

We have one windows 2003 server and 40 client machines with Windows XP. We access internet through a DSL connection.
The problem we face is that the local area network becomes too slow if the internet connection is switched off. Why does this happen and how can this problem be solved?

Regards
Vipin

You are going to have to give us more details. What is the layout of your network? Are all the clients connected to the DSL modem directly? Is there a router involved? Are you using proxies? Are you using ICS(Internet connection sharing)?

On those computers, are they running programs that need the internet? They may be checking to see if the connection is back, which may be bogging the network down and slowing the computers.

Or perhaps your dns is not configured correctly and once the internet if off name resolution have to drop down to broadcasts to resolve.

if you have a domain what are your PCs setup to use as a DNS server first? you should have the PCs pointing to the windows server only as a DNS server and when it cant resolve it will forward to the root servers. if you have a puplic dns first and in a domain it will do this as active directory uses dns.

Thanks a lot.