The fire at a electricity substation in Spring Gardens continues to burn this eveing as emergency services fight to contain it.
The incident occurred at the sub-station next to the East Coast railway line, at about 5pm today. Five crews from Lincolnshire Fire and Rescue are at the scene, while police have also blocked off the area, including London Road.
Much of the town centre lost electricity when an explosion occurred at the substation, but most properties have had their power restored.
There was concern that a second substation nearby might also be consumed by the blaze.
Nobody has been reported hurt in the incident.
The East Coast Mainline is currently closed through Grantham, and Virgin Trains have confirmed that the fire is believed to involve gas cylinders.