More deaths are feared as the tunnel, dug for a new underground urban railway, collapsed suddenly yesterday.
The collapse trapped at least 50 workers and created a huge crater where 11 vehicles were stuck. A building affected by the collapse has also been demolished.
Eleven vehicles were also trapped in a 75m long, 15m deep crater after a section of road collapsed into the tunnel at about 3:20 p.m.
More than 1,000 policemen and fire fighters participated in the rescue work. They are pumping water from the tunnel as water from a nearby river flowed into the tunnel soon after the cave-in.
"There is a slim chance for the trapped workers to survive because of heavy flooding in the crater," said rescue headquarters chief Wang Guangrong, adding that the water level once reached six meters at its highest.
Contractor China Railway Construction Group Co., Ltd., has halted all the subway construction works in the city for safety checks, said the group's vice president Bai Zhongren.
The provincial work safety bureau and construction bureau have set up an investigation group to find out cause of the accident.
Construction of the first phase of Hangzhou's subway network was launched in late March last year, comprising sections of the No.1, No.2 and No.4 lines. The accident site is part of the No. 1 line.
The railway project would extend 70km from the city's northeast to the south at a total cost of £3bn, to complete in 2011.
Hangzhou plans to establish eight subway lines with a total length of 278km by 2050.