Ford is in the midst of a scandal involving an alleged video that shows the mayor smoking crack.
"There's nothing more I can do for you," the source quoted Towhey telling Ford. The chief of staff then told Ford to "go away and get help."
The Toronto Sun's Don Peat is also reporting that Towhey, who had been heading Ford's office for almost a year, had urged the mayor to seek assistance.
Towhey reportedly told Ford: “If you don’t do this, we’ve got nothing else, I can’t help you.”
The Globe and Mail is reporting that people in the mayor's inner circle had crafted a plan to put the mayor on a plane to a rehab centre and then issue a statement after he had left.
There are also reports that Ford was upset over losing his volunteer job as coach of the Don Bosco Eagles, a high school football team, on Wednesday and wanted to invite players and other coaches over to his house for a get-together. The source told the Sun and the CBC that this would be a bad idea and would embroil more people in the scandal currently swirling around Ford.
There was speculation earlier on Thursday that Ford's football firing may have played into Towhey's dismissal.
Peat's story is the front-page of tomorrow Toronto's Sun, a newspaper that has been a fierce defender of the mayor.
— Adrienne Batra (@AdrienneBatra) May 24, 2013
Towhey's exit comes at a critical time for the Ford administration. Last week, the Toronto Star and Gawker reported on the existence of a video that allegedly shows Mayor Ford smoking crack. Ford has been quiet about the allegations, only issuing a brief statement calling the matter "ridiculous." On Wednesday, his brother, councillor Doug Ford, made a full-throated statement defending the mayor, calling the allegations a media vendetta against his brother.
Gawker is currently running a campaign to buy the video from the alleged drug dealers who shot the footage. Thursday evening Gawker published a post that said that it has not been in touch with the men for several days.