local area network connection slows down when internet is connected

In our Office we have around 70 machines connected to 2 domains in windows 2000 environment. We use static IP address within the lan environment. My machine connection property is as follows.
IP 116.116.116.111
subnet mask 255.0.0.0
default gateway 116.116.116.140

preferred dns server 203.145.184.13
Alternate dns server 202.26.250.15

if I remove the preferred and alternate dns server I cannot connect to Internet but local network access is smooth. when i enter the dns address as above i am able to connect to internet but local area network access is very slow.
I know the local network address is not correct which should be something like 192.168.1. something. what should i do to improve the local network connection without losing the internet connection? Thanks in advance for any guidance.