Claire Lomas, who was paralyzed in a horse riding accident, lit the cauldron from the English national flame kindled on Scafell Pike.
British Prime Minister David Cameron, London Mayor Boris Johnson and London 2012 chairman Lord Sebastian Coe attended the ceremony.
The relay travels from Stoke Mandeville to London overnight on Tuesday for the Games opening ceremony on Wednesday.
David Cameron marked the occasion by wishing Paralympic Games competitors good luck.
“After a fortnight of Olympics withdrawal symptoms, it’s time to dust off the GB flags and get ready for two more weeks of spectacular sport,” he said.
“Over these next two weeks, we’re going to have more of those moments that will bring us together and make us proud.
“We are going to show the whole world that when it comes to putting on a show, there is no country like Britain and no city like London.”
Claire Lomas, who completed this year’s London Marathon in 16 days wearing a “bionic suit”, was left paralyzed from the chest down in a riding accident.
Using a Paralympic torch she lit the cauldron which will stand on the north terrace of the square outside the National Gallery.
She said: “It’s an amazing opportunity and I feel very proud and privileged to be asked.
“I wish everyone competing in the Paralympics loads of luck.”
During the event, 26 flame ambassadors from across England collected a flame in a lantern to take back to their local celebrations.
Lord Sebastian Coe said: “The national flame in England will help to light the way to the Paralympic Games.
“It will also give people the chance to celebrate the amazing achievements of the inspirational Torchbearers who all embody the Paralympic values of courage, determination, inspiration and equality.”
Later, he insisted that organizers strive to fill any untaken accredited seats during the Paralympic Games but denied there had been empty seats at Olympic venues.
“We didn’t have any empty seats, every venue was absolutely full to the gunwhales.
“What you’re talking about is the unscientific nature of accredited seats which happens at every Games.
“We will do what we can during the Paralympic Games to make sure that, for most of the time, those accredited seats are used.”
Mayor Boris Johnson said: “1948 was an amazing year for this country. The NHS, the first Land Rover, the first Routemaster bus was planned, Shakin’ Stevens was born somewhere in Wales and the Paralympic movement, which is something that’s grown massively now.
“The success of the Paralympics tells us something about Britain and the way the country has changed.
“The Olympics showed what we can do and I think the Paralympics will show what kind of people we are, what’s going on in our hearts.”
Before the cauldron lighting the flame visited the Royal Opera House. Later in the day it will be carried in front of performers from the Notting Hill Carnival, visit the Houses of Parliament and be taken on the Docklands Light Railway.
A giant Paralympic Agitos logo, the symbol of the Paralympic Games, has been suspended from Tower Bridge to herald the coming event.
Four national flames were kindled at the summit of the highest peaks in Scotland, Northern Ireland, England and Wales on Wednesday.
Following on from the event in London, the national flames will be used to light cauldrons outside Stormont in Northern Ireland on Saturday, at The Mound in Edinburgh on Sunday and outside City Hall in Cardiff on Monday.
Next Tuesday the four flames will be brought together in Stoke Mandeville where they will create the Paralympic flame, signalling the start of the relay.
Starting out from Stoke Mandeville Stadium at 20:00 BST, the Paralympic flame will be carried 92 miles by 580 torchbearers, working in teams of five, through Buckinghamshire, Hertfordshire and London to the Olympic Stadium in Stratford.
There it will be used to light the cauldron at the opening ceremony of the Games on the evening of 29 August.
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