The People says with all the uncertainty over owner Mike Ashley's attempts to sell the club for a knockdown £100million, the Shearer camp fear the club is "floating towards oblivion".
Further bad news for Shearer is that the two serious bidders looking to buy Newcastle would prefer him to work under a more experienced manager.
A source close to Shearer last night revealed: "Alan is so low at the moment.
"In fact, I've never heard him sound so depressed about Newcastle United and the future. Friday was supposed to be D-Day regarding his future at the football club.
"He wanted news on his new contract it's true, but more important to him is the transfer budget. He wants the sort of funds that will help him fire the club straight back into the Premier League.
"Yet all he got was a brief message from Derek Llambias saying that no progress had been made. As far as Al is concerned, no news is very bad news indeed. He fears the club is floating into oblivion."