© Reuters / Toby Melville
National Grid said it was caused by issues with two power generators but the problem was now resolved.
Blackouts were reported across the Midlands, the South East, South West and North East of England, and Wales.
Hundreds of people were stranded at King's Cross station as trains were delayed and cancelled.
Traffic lights in some areas also stopped working.
The Department for Transport, said: "Today's power outage has had knock on impacts on travel.
"We're working hard with Network Rail and others to ensure systems are up and running as quickly as possible, so that everyone can complete their journeys safely."
At the height of the Friday rush hour, all trains out of King's Cross were suspended and remained so for most of the evening.
Passenger Zoe Hebblethwaite said the situation outside the station was "absolute mayhem" and that passengers "couldn't find an assistant to speak to".
The BBC's Emma Petrie said there was an announcement asking passengers to leave the station.
By 21:00 BST, more than 1,000 passengers appeared to be stranded at King's Cross, with London North Eastern Railway and National Rail advising customers against all travel for the rest of the day.
Later on, some LNER trains were running southbound into King's Cross, and services to Stevenage and Peterborough from London also resumed, but not further up the East Coast Main Line.
Boards at Waterloo station showed no trains departing on any platforms.
Harriet Jackson, 26, said there was an "apocalyptic" scene on Northcote Road, in Battersea, when traffic lights cut out and cars were not stopping.
"Given it's a Friday afternoon, it's the last thing you want to encounter," she said.
Passengers at Newcastle Airport said the power cut out for about 15 minutes, but Heathrow, Gatwick and Luton airports said they had not been affected.
Scott McKenzie, 31, from Cardiff, said "various alarms were going off" at Newcastle Airport.
"We were literally plunged into darkness and people were using their phones as torches to see and get around," he added.
About 500,000 people were affected in Western Power Distribution's area - including 44,500 customers in Wales - with power restored to them all shortly after 18:00 BST, the company said.
Northern Powergrid said 110,000 of its customers lost power between 17:10 BST and 18:00 BST, while Electricity North West said at least 26,000 people were without power in the North West.
UK Power Networks spokesman said 300,000 people were affected in London and the South East.
Network Rail said all trains had been stopped after a "power surge on the National Grid" but its signalling system had come back online.
In a statement, National Grid said: "Even though these events are outside of our control, we have plans in place to respond and the system operated as planned by disconnecting an isolated portion of electricity demand."
The action allowed the system to "protect itself and limit the fall in frequency", which allowed for "power to be quickly restored", it added.
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