Concerns were voiced after revealing pictures were posted on the internet by an American man who claimed he shared a drugged-up one-night stand with the 21-year-old.
Peaches flatly denied the claim that she had taken heroin on the night in question, but has since been axed as the face and body of underwear brand Miss Ultimo.
The Daily Mail reports that the lifestyle of Sir Bob's daughter is worrying friends of her late mum Paula, who died 10 years ago from a heroin overdose.
Belinda Brewin, the best friend of Yates, told a friend: "Everyone can see what's happening, but would you really want to be the one to have to tell Bob he's got to do something? If she was my daughter, Peaches would be in her second year of university, not living alone in Los Angeles."
Yates's PR agent and friend Gerry Agar added: "Things have been going disastrously wrong for Peaches for a while because she refuses to listen to the people who try to stop her.
"She is surrounded by a group of toxic people who are addicted to her fame. They have a really tight grip on her and so she believes them when they say she is untouchable. I feel sorry for her because I think it's tragic she has become so trapped. It will be her downfall. For me, it is so frustrating because I am literally watching history repeat itself."