According to an insider, Jackson, 20, has even agreed to go back to rehab.
"She was concerned about Demi, and in shock when she heard the news. She feels her problem could get bigger if not dealt with appropriately."
As RadarOnline.com reported, Lovato, 25, was hospitalized in Los Angeles for a possible heroin overdose on July 24, just one month after she admitted she had relapsed following six years of sobriety.
Fearing the worst, Jackson's mother, Debbie Rowe, and grandmother, Katherine Jackson, worried the King of Pop's daughter was headed for a similar downward spiral and were planning an intervention.
Jackson's vices, claimed the source, have included the potentially deadly mix of alcohol and drugs.
Concerns over Jackson's questionable behavior have been mounting since the death of her grandfather Joe Jackson in July.
"Paris has refused to talk to her family," explained the source. "She was embarrassed and saddened that more wasn't done for her grandfather when he died, and she had enough."
Since then, Katherine, 88, has grown increasingly concerned and confronted her 20-year-old granddaughter when she recently picked up a few possessions from her Calabasas compound.
Insiders said Jackson had a joint in her hand, a little pet snake around her arm and she "smelled like alcohol" as a group of rowdy friends waited for her in the car.
"She was stumbling a bit and clearly high or drunk," according to the source. "Her friends aren't good for her and they take advantage of her."
Since her superstar father died when she was just 11, Jackson has struggled to deal with her issues.
By the age of 15, she had attempted suicide; by 17, she had been in rehab and AA.
Jackson's family recently went through the roof after seeing her new topless campaign photos for G.H. Bass & Co.'s footwear — and it was the last straw.
"At the end of the day," said the source, "Paris will have a breakdown and it won't be good for anyone unless she goes back to rehab."
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