South West Trains is warning of severe disruption across the whole network for the rest of the day.
The train company said delays were still ongoing on journeys towards London Waterloo after a loss of all signalling in the Earlsfield area of south-west London.
It said trains could be cancelled, delayed by up to 90 minutes or revised until the end of service.
Waterloo handles about 100 million passenger journeys a year.
SWT had already warned of disruption because of a track defect on a set of points between Woking and Surbiton, which blocked the London-bound fast line.
A company spokesman said: "Services are still recovering from a major signal failure on mainline services through Clapham Junction to Waterloo."
Network Rail apologised for the disruption and said it would continue to work to resume a normal service as quickly as possible.
South West Trains passengers are set to face severe disruption next month when work begins to extend platforms at Waterloo, meaning many services will not be running and some commuter stations will be closed altogether.