I always think it it unfortunate that paper training is still foremost in people's minds as a housetraining approach. As far as I have found, it is a total waste of time -- the short-term convenience you get of having the puppy learn to go on a particular spot inside during the brief period when they can't hold themselves very long is more than offset by the fact that you have to totally re-housetrain again to go outside. Who in their right mind wants to housetrain TWICE? :yikes But it was the norm long ago when it might have made a bit more sense of people were home all day and really focused on the puppy. That isn't the case now. I think that in most cases this is extremely confusing to the dog who has worked hard to do what pleases you by learning to go inside then is suddenly switched to outside -- which to them,must make no sense at all, and leads to lots and lots of accidents when the papers vanish.
To put this in human context -- imagine you are taught a task at work to be done one way which you are praised for doing correctly for a few months, then all of a sudden and for no apparent reason you are expected to do it a completely different way. It is very hard to do correctly for the first while and would be very frustrating too! And at least we can understand an explanation -- with a puppy or dog, we can only try to train and reward. Or to give a dog example -- many of us find that if we first housetrain in an area of grass, our pup will not go on pavement for a long, long time, and vice versa. Even something like the type of ground underfoot becomes associated with the 'right' behaviour and is very hard to change.
Most modern housetraining manuals recommend totally skipping the (useless!) interim state of training to papers. This is more labour-heavy for the owner in the first 2-3 months, especially the first 4 weeks -- but saves time and mess in the longer run, and avoids the problems you are having now.
Whether you are in the UK/Ireland or in North America the two books that should be on every new puppy owners shelves is Shirlee Kalstone's How to Housetrain Your Dog in Seven Days and any of Dr Ian Dunbar's puppy manuals,for example, Before and After Getting Your Puppy: The Positive Approach to Raising a Happy, Healthy, and Well-Behaved Dog. Having these to hand will answer so many questions right away and also, help people avoid problems before they arise by correct training.
Amazon in the UK is offering these two together at a discount:
http://www.amazon.co.uk/Before-After-Getting-Your-Puppy/dp/1577314557
You have some good advice in this thread on ways to manage the problem -- which is basically recognising your puppy has to be re-housetrained all over again to go outside. Using a crate in this process (Kalstone gives instruction) may help.