The footballer was rushed to intensive care when his organs began to shut down following his arrival at the Meadows Rehabilitation Centre in Phoenix, Arizona, five days ago, The Sun reports.
A friend was quoted as saying: "Gazza's in a bad way. He's much worse than he was and desperately needs help. He's had really bad withdrawal symptoms relating to not drinking since arriving at the clinic.
"His internal organs are shutting down and he's in intensive care - it's a potentially life-threatening situation. If he doesn't receive the best treatment from doctors he could die."
Gascoigne's former captain at Tottenham Hotspur Gary Mabbutt has since told Sky Sports News: "The first thing Paul underwent was a detox. Unfortunately he had a very bad reaction.
"He was transferred to hospital in intensive care where they could monitor him but he's recovering and hopefully soon he will be back into the clinic."
It had been feared that Gascoigne could be forced to leave hospital if he couldn't afford the treatment. The former England star is said to be broke, with celebrity friends including Chris Evans, Gary Lineker and Piers Morgan raising £25,000 to pay for his stint in rehab.
The treatment costs £7,500 a week. British Airways, meanwhile, apparently paid for Gascoigne's first-class flight to the US.
Gascoigne sought treatment for alcohol addiction following his recent public breakdown at a charity dinner in Northampton.
Evans said last night: "When I saw the pictures of my old pal last week at a so-called personal appearance, even I was shocked.
"I say even I, because I've seen him bad before - much worse than you might imagine. Paul has been on the edge for well over a decade now, although admittedly never closer than of late."