The troubled actress - who has been ordered to stay inside the confines of her apartment in Venice Beach, California, until June 29 while she serves a sentence for violating her probation and theft of a necklace - allegedly tested positive for alcohol earlier this month and Michael blames her friends for her latest problems.
He said: "I'm so worried about my daughter.
"I'm very, very concerned about the people around Lindsay and the pressure being put upon her.
"If it turns out that the test was positive, then I have strong concerns because if a person can't stay straight in the house where can she stay straight?"
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Michael visited Lindsay last Sunday (19.06.11) for Father’s Day and claims she wasn’t under the influence of any substances at the time but he believes it would be beneficial if she went back to rehab.
He told RadarOnline.com: "When I saw her over the weekend to me she didn't seem like she had any alcohol in her system.
"I'm still opposed to jail. She needs to go into rehab. She needs to be in a programme called G&G Holistic in Florida. They will not only give her rehabilitation, but they are a detoxification center and they don't believe in prescription drugs. I don't think Lindsay needs to be on any prescription drugs, and I think that's part of the problem."