This problem happened to my Panasonic cordless phone set (kx-tga631ct). The display of all handsets showed "line in use" even though no phone was being used (all placed in the charger).
The first step in troubleshooting is to test your phone line with a corded phone to see if you get a dial-tone out of it. If you don't have a corded phone, borrow it from somebody or buy one. It's cheap and good to have. If you get the dial tone out of your corded phone, then your line is OK. Try with the fix for your cordless below.
Note: The fix below might work with other cordless sets.
1. Unplug the power adapters of all of the handsets
2. Take out the batteries in each handset
3. Let them sit for at least 12 hours to allow the internal memory to be completely clear out. (I let mine sit for 15 or 16 hours over night. I have read on the Net, and some people reported that they had tried the fix but it didn't work. That's probably because they did not leave them out long enough to clear the memory.)
4. After 12 hours or more, plug in the power adapter of the main handset, then put its batteries back in. Try with the main handset first, that's what it is.
Once the display comes up, see if you still get "line in use" message. Just place your phone back in the charger. If you do not see "line in use" anymore, all is good. Otherwise, guess it's time to buy a new set :)
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