BT issued a statement earlier today saying that most of the water that had flooded the exchange building overnight had been pumped out and power has been restored to most of the site during the day.
A spokesperson said that "We are now beginning to restore communications services to customers and this work will continue throughout the day". Tiscali LLU customers who had been disconnected for several hours have been restored earlier today.
Telecom company Gradwell reported that at 1600 today, they were told by BT that "the main interconnects have been restored but there will be congestion for some time until BT central core manages to clear".
An update issued for BT Total broadband customers at 1500 says that it won't be able to provide with exact details as to when the systems will be restored.
Someone posed a photo of the flood from inside the Paddington exchange which shows the extent of the damage caused by the water and claimed that the water rose to 18-inches (41 cm), prompting BT to pump "millions of gallons" of water outside the exchange.
The downtime has also had a major impact on businesses across London as card payment systems - some of which rely on the telephone network - were unavailable, meaning that smaller businesses would only accept cash transactions.
The calamity will provide the businesses with an opportunity to put their disaster recovery plans to test - assuming of course that they have one. The incident also shows that it doesn't take much to knock businesses offline and paralyse even payment systems.