Gascoigne was involved in many off-field incidents, and despite his obvious talent is believed never to have fulfilled his great potential as a player. Since his career finished he has suffered from alcoholism, mental illness and personal legal problems.

Gascoigne was born in in Dunston, Tyne and Wear, England, the second of four children of John Gascoigne (a hod carrier) and his wife Carol.

Gascoigne started playing football at the age of four, playing almost non-stop in the street and nearby park. He played for his school Brighton Avenue Primary School team from the age of eight, and later played for the local Redheugh Boys' Club despite being under the minimum age. He later attended Breckenbeds Junior High School (which closed in September 1996) in Low Fell, then the Heathfield Senior High School (also closed in September 1996).

He caught the attention of the football scouts while playing for Gateshead Boys, and was given a trial at Ipswich Town although he failed to impress. Further trials at Middlesbrough and Southampton also proved unsuccessful, before Newcastle United signed him as a schoolboy in 1980. At school he was once caught practising his autograph during a geography lesson, his reason being that he was "going to be a famous footballer". His teacher, Mr Hepworth, was not impressed, telling the young Gascoigne that "only one in a million becomes a professional footballer." Nevertheless, he was signed on as an apprentice at Newcastle in 1983, initially playing for the youth team under Colin Suggett. It was at this time that his nickname of "Gazza" was first coined.[citation needed]

However, while Gascoigne was successful on the football field, his childhood was marked by instability and tragedy. Initially his family lived in a single upstairs room in a council house with a shared bathroom, and moved several times during Gascoigne's early life. When he was ten his father moved to Germany to find work, and Gascoigne witnessed the death of Steven Spraggon, the younger brother of a friend, who was knocked down by a car. His father also suffered a brain haemorrhage and was in hospital for eight months. In his autobiography, Gascoigne reports that around this time he started exhibiting twitches and symptoms of Obsessive compulsive disorder. In addition to this, he began shoplifting - chiefly from slot machines and sweets from a local newsagent. He describes the thefts as being motivated not by need for the goods but by the need for excitement.[citation needed]

Subsequently Gascoigne developed an addiction to gaming machines, frequently spending all his money including bus fare home on them. Around this time he first drank alcohol, getting drunk on a bottle of vodka stolen by a friend at age fourteen, but ill effects led to Gascoigne swearing off alcohol for life - in the event he didn't drink again until he was eighteen. Furthermore, death made another appearance in Gascoigne's life when a friend whom he had encouraged to join Newcastle United from Middlesbrough went to work with his uncle in the building trade while waiting for an opening at Newcastle and was killed in a building site accident.

Paul captained Newcastle's youth team in the 1984-85 season, winning the FA Youth Cup where he scored twice in the second leg of the final against Watford. Manager Jack Charlton picked him as a substitute for the Tyne-Wear derby with Sunderland, although he did not make it onto the pitch. He made his first team debut at home to Queens Park Rangers on 13 April 1985, coming on as a substitute. Soon after he signed his first professional contract, and made a further appearance for the first team. Willie McFaul took over as manager soon after and awarded Paul his first start in the black and white shirt, on the opening day of the 1985-86 season at Southampton. He scored his first goal at home to Oxford United in a 3-0 victory at St James' Park, with a further eight following in the 1985-86 campaign. Newcastle finished 11th in the First Division that season and, at the end of it, Paul was featured on the front cover of the Rothmans Football Yearbook.

Gascoigne's burgeoning career seemed to rise in conjunction with his capacity for getting into trouble. After a hit and run incident with his drinking mate, Jimmy 'Five Bellies' Gardner, initially wrecked the car to make out it had been stolen before admitting their crime, Gascoigne was fined £260 and given eight points on his 'non-existent license'. He was told by Mr McKeag, one of the Newcastle directors, that this would be his last warning. Gascoigne later passed his test after having initially bribed an examiner who subsequently failed him anyway. His rise through the Newcastle youth team was not a happy one as he felt constantly picked on about his weight and his misbehaviour. After one instance where he felt particularly picked on, he took a groundsman's tractor and drove it straight into the dressing room wall, jumping off just before impact - he was fined £75 for this. Though confident in his ability, Gascoigne confessed to envy of Ian Bogie who he felt was a superior player to him.

Gazza also had doubts as to the direction the club was going, especially when they sold Chris Waddle, something he felt was a bad sign. In all competitions he made a total of 107 appearances for Newcastle, scoring 25 goals. At the end of the 1987-88 season, he was named as the Barclays Young Player of the Year and was subject of offers from both Manchester United and Tottenham Hotspur. Gascoigne's first choice was Liverpool but with no offer forthcoming, Gascoigne promised Alex Ferguson that he would sign for Manchester United. Ferguson duly went on holiday to Malta, where he received the news that Gascoigne had signed for Spurs, for a British record fee of £2million. The record lasted just six weeks until Tony Cottee moved from West Ham United to Everton for £2.3million.

In his 1999 autobiography, Ferguson claimed that Gascoigne was wooed into signing for Tottenham after they bought a house for his impoverished family.