And Scotland Yard confirmed one of several reports of explosions on buses in the city - in Tavistock Place - but said the cause was not yet known.
One caller to BBC Five said his friend had seen "the bus ripped open like a can of sardines and bodies everywhere".
Number 10 said it was "still unsure" whether the explosions were a terrorist attack and although casualties were reported, no further details were yet available.
Ministers are meeting to clarify the situation and the government will make a statement later, Leader of the House Geoff Hoon told the Commons.
PA also quoted union officials as saying sources had told them there had been at least one explosive device on the Underground.
British Transport Police said incidents took place at Aldgate, Edgware Road, King's Cross, Old Street and Russell Square stations.
Scotland Yard confirmed they were assisting with a "major incident" and said there were casualties.
Hospitals have said they are no longer accepting non-emergency cases, BBC Five Live reported.
The National Grid, which supplies power to the Underground, said there had been no problems with its system which could have contributed to the incidents.
'Screaming and crying'
Jacqui Head, from BBC News, who had just left King's Cross station on a Piccadilly Line train as an explosion happened, said: "Everything was normal. Suddenly there was a massive bang, the train jolted.
"There was immediately smoke everywhere and it was hot and everybody panicked. People started screaming and crying."
The train was kept in the tunnel for 20 minutes and no announcement was made to explain the delay to passengers, she added.
Liberal Democrat MP Simon Hughes, near Kings Cross, told Five Live: "My only thought in the midst of all this confusion is that after the celebration of yesterday (for the Olympic 2012 London success) for people to be evil enough - if it is the intentional causing of death and injury - and think that they can justify this in any circumstances is completely unacceptable."
London Fire Brigade said four crews were at Liverpool Street and more were on their way.
Another passenger, who had left the Tube at Fenchurch Street Station, and walked to Aldgate East, told BBC Five Live that he saw injured people.
"As I walked through the bus station I could see people lying on the ground, black, as if they'd been covered in smoke. There were about three or four people on the floor being treated."
Eyewitness Paul Woloszyn from BBC News, who was at Blackhorse Road station on the Victoria Line, said: "We were told there was a bomb at Liverpool Street station.
"I was on the Tube, and they stopped the train and told everyone to get off and evacuate the station."
He said staff had said the entire Tube network had been affected, and leaflets had been handed out with details of alternative bus routes.
Another eyewitness, Dorothy Molloy, had been on a Tube train at King's Cross and said "staff just chucked everyone out of the station".
She said staff there had not given any details, but she said two passengers she had spoken to had said they had received messages saying there had been bombs.
"People didn't really know what was going on, they were just huffing and puffing and saying how annoying it was," she said.
"People don't seem to be panicked, but there's so many police and ambulances coming into the areas. People are just concerned, and some are just annoyed at the delay."
LONDON TUBE EXPLOSION CHAOS 0849 - Report of explosion on Metropolitan Line between Liverpool Street and Aldgate Further explosions reported at Aldgate East, Edgware Road, King's Cross, Russell Square and Moorgate Two Underground trains collide near King's Cross |