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In the Eighth Doctor Adventures novel The Ancestor Cell by Peter Anghelides and Stephen Cole, Gallifrey is destroyed by the Eighth Doctor to prevent the voodoo cult Faction Paradox from starting a time war between the Time Lords and an unspecified Enemy.
In The Gallifrey Chronicles by Lance Parkin, it is revealed that the Time Lords had survived within the Matrix, which had then been downloaded into the Doctor's mind, although he had to sacrifice much of his memory to make space for it.
Their reconstruction is possible, but will require a sufficiently advanced computer.
At the novel's end, the question of whether or not the Time Lords will be restored remains unanswered.
However, it can be assumed that both they and the planet are restored at some point before the start of the 2005 series if the novels are to remain consistent with the new series ' continuity.

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