Death and bereavement services will "highly likely" be overwhelmed even if just 1% of people who contract Covid-19 die, say academics from the University of Huddersfield.
A major increase in mortality rates, coupled with staff absences, would lead to struggles issuing death certificates, a bottleneck in funeral services and overfilled mortuaries, they warn.
Limited cemetery space could also be a major problem, with mass graves a possibility.
However, the researchers acknowledge this would be "highly controversial and would upset and anger many communities".
It comes as work started on a temporary mortuary at Birmingham Airport, with space for up to 12,000 bodies in a worst-case scenario amid the Covid-19 outbreak.
The airport is next to Birmingham's National Exhibition Centre (NEC), which has already been mooted as a possible location for a temporary field hospital.
Dr Julia Meaton, Dr Anna Williams and researcher Helen-Marie Kruger, authors of the paper, examined the capacity of a northern English local authority to manage excess deaths resulting from a pandemic.
The research was undertaken in 2019 but updated to reflect potential scenarios in the current outbreak.
The authority, which has a population of nearly half a million, conducts approximately 3,000 cremations and 500 burials per year.
Under normal conditions the local authority's processing capacity is 120 bodies per week and it can process up to 60 death certificates a day.
The authors' analysis suggests services in the area would be over capacity each week by several hundred bodies, based on an overall death rate of 1%.
They write: "The impact of such an increase from normal levels will mean that the authorities will struggle to maintain death registrations and disposals that will potentially have serious consequences.
"Practically, not being able to register a death or obtain a death certificate will mean that disposal cannot take place.
"There will be a bottleneck of burials and cremations, causing ceremonies to be delayed with mortuaries filled beyond capacity.
"Families will be prevented from closing bank accounts, pensions, selling property or receiving insurance, which could have financial implications."
They identify the most pertinent issues as staff shortages, lack of supplies, body storage, cemetery space and the unknown rate at which bodies and registration requests will reach services.
One worker the researchers interviewed said that "certainly in some of the cemeteries we could end up going back to mass graves depending on the volume of excess deaths".
A mortuary worker expressed concern about body storage space and said they would have to call the Army if inundated during a pandemic.
The researchers continued: "In a pandemic situation, there is likely to be a necessary change to the 'business as usual' death and bereavement management services.
"How humanely these are managed is hugely important for those affected at the time of crisis and the humanity of the Government's response will reflect the nature and values of our society, and will be judged accordingly."
One option they outline is that services prepare for a worst-case scenario, which can then be scaled back in accordance with the anticipated mortality rate.
They may also need to ring-fence employees so that they can be called on during periods of severe staff shortfalls.
An online death registration service could be developed to speed up the process, but the authors warn this could be open to misuse with insufficient safeguards.
The paper, Pandemic Continuity Planning; will coronavirus test local authority business plans?, is published in the online journal, Emergency Management Review.
A Local Government Association spokesman said: "As the epidemic develops, councils will review how they work with local partners, like funeral directors and private crematoria, to ensure delays in conducting funerals are minimised while continuing to treat the deceased with dignity and respect.
"Councils will also review the new provisions in the Coronavirus Act and whether the powers that might be made available to councils by government could be of help in their area.
"However, councils will initially be looking with partners like funeral directors at how they can streamline the existing death management process, so powers such as those in the Act only have to be used as a last resort."