When basil starts flowering, it generally stops producing leaves. So it really depends on what you want from your plants.

You can safely cut basil back much further than just a few sets of leaves from the top, especially at this time of the year. As long as the plant still has leaves and is otherwise healthy, it will continue to grow. I regularly harvest basil by cutting the plant back by one-half or more. If you don't need that much basil at once, don't cut so much. The more often you cut, the more you will get over the course of the season. Of course, the more you cut off the plant at once, the less frequent watering it will need for a while, until it grows back. This method will also keep the flowers at bay for a longer time.

I finally had time to repot some small 2.5 inch potted plants that were about a foot tall and flowering (about half a dozen different Italian types that I wanted to trial). I cut them back to a couple of green buds and leaf sets (down to about 6 inches tall-most of the bottom leaves had fallen off because the plants were so pot bound). They looked pretty pathetic before and after being pruned. I repotted them into 12 inch pots and now they look terrific. The transformation took a little less than 3 weeks.

F. DeBaggio

Thai basils seem to flower much earlier than others.
What you can do is to nip the flower cluster and also harvest, to encourage new growth.

And from my experience, thai basils still produce quite nicely after booming.

FataMorgana

I have two varieties of thai basil that I grow and they both produce flowers early on. I would "top" the plants (1 to 2 leaf nodes below the flower) to give it a trim or just harvest some for cooking. The flowers don't bother me much, I just have my scissors/pruners handy whenever I'm in the garden.

Lali

The flower buds actually taste quite good

I leave the flowers for the bees, and the little birds eat the seeds ... and the basil is waist high and thriving.

For cooking, I snip a branch and take off the leaves, compost the rest of it.

This is the second year for the basil and it was flowering most of last year too.

I have one variety of basil that hardly flowers. Actually right now at a height of 2 feet it is growing budds. It also has a peppery but mild taste. The leaves are extra tender and the color is very light green.
So here I have a Thai basil that started growing seeds from a short cutting that I rooted and one that takes almost two monthe to flower. I also have a purple, small leaved basil that does not flower at all. And then I have some common basils that keep flowering and get yellow/green. I am scratching that one out. I am going to pull all of them out and dehydrate the leaves.
I like the Thai and the tall (do not know name).I have already saved Tahi's seed and will save from the other.
This is an experience without a cost.

My wonderful Thai Basis has gone to flower while we were on a one week vacation and the leaves are now bitter & terrible tasting. If I prune the plant back drastically do you think the new growth will return to the sweet licorice taste?

Bitterness is probably due to lack of water and extreme heat.
Feed it lightly and water it more regularly.
You can also regrow from cuttings. But have to do it inside or outside in a cool shaded area, then plant where you want.