Officers have approached the building and used ladders to peer through windows with torches looking for the gunman, Eli Hall.
Shortly before that a series of loud bangs were heard, thought to be police distraction grenades.
Earlier on Thursday a fire broke out inside the building in Hackney, there was an exchange of gun shots between Mr Hall and armed officers and CS gas was used in an attempt to flush him out.
A freelance journalist, who lives near the property, has reported hearing the police discuss the gunman's welfare.
Matthew Brown reported hearing an officer on the phone saying "at least we have found him", "badly burned" and "at least he's alive".
But there is no official confirmation yet whether Mr Hall is dead or alive - 15 days after the siege began on Boxing Day.
Longest siege
Earlier on Thursday evening Metropolitan Police Commander Bob Quick said: "Clearly I think the siege is now entering its final stage."
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There are parts of the building relatively unaffected by the fire, so the gunman could have sought refuge there and be alive and well
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Commander Bob Quick
After the fire broke out officers had to shoot plastic baton rounds to smash the windows of the flat to enable firefighters to douse flames with water.
When the shots were exchanged, police negotiators used loudhailers to plead with the gunman to give himself up immediately.
One was heard telling Mr Hall: "You are in great danger. Please come out now, without the guns."
He is known to have petrol inside and police believe he started the fire himself.
Structural concerns
Mr Quick said the gunman would have inhaled a considerable amount of smoke and police have not heard from him since the fire started.
"There are parts of the building relatively unaffected by the fire so the gunman could have sought refuge there and be alive and well.
"However we have no information on his well-being at the moment and we are evaluating the structure of the building because there are real fears that it's structurally unsound," he said.
About 43 people have been trapped inside their homes near the scene and the incident has caused massive disruption to the area.
Hostage freed
The operation began when officers were fired on as they tried to remove a car for forensic tests.
Shots were fired twice on Sunday and again on Monday night.
Four streets around the area are closed, and about 50 police officers are deployed around the clock.
Another man was held hostage for the first 11 days of the stand-off, but managed to escape on Sunday.