The former Grand National winner remains in intensive care, with doctors saying it is too early “to predict the extent of long term recovery”.
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The Irishman, 47, was taken to hospital on Friday after he was unseated when his mount Ben Moacdui left the stalls during a Sprint Handicap at Newcastle Racecourse.
In an update to his condition, the Injured Jockeys’ Fund said Lee had “suffered an unstable cervical fracture causing damage to the spinal cord”.
They added he has “damage at blood vessels in the mid-cervical region”.
The “hugely popular” rider is currently receiving medical help for his breathing in the ITU at the Royal Infirmary Hospital in Newcastle.
The Fund said: “This is a very serious injury and at this early time it is not possible to predict the extent of long term recovery.
“Graham’s family are very grateful for the many messages of support that they have had.”
Lee’s 1000-plus victories include the 2004 Grand National on Amberleigh House and the Gold Cup with Trip to Paris 11 years later.
He has been equally successful in flat racing since 2012 as was he was on the jumps before that.
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Dale Gibson, the interim chief executive of the Professional Jockeys Association, explained how Lee’s accident has shocked the racing world.
He said at Newcastle Racecourse: “Any time a jockey gets injured, there’s always a real sense of community and group feeling and that’s very much the case now.
“Graham is hugely popular and what he’s achieved in the sport is incredible.
“The PJA and the weighing room very much want to send our best wishes to Graham and his family.”
Broadcast legend Derek Thompson underlined the wave of affection for the injured rider across the racing world.
The BBC presenter posted: “Graham Lee is simply one of the finest both in & out of the saddle.
“A top class horseman and the first to say ‘hello’ at the racecourse – always the one to have a laugh & a joke with. Sending prayers & strength, Big Fella, for a successful recovery.”
Lee had won 47of his 598 races this season, including 15 for Ben Macdui’s trainer Paul Midgley.
He lives in Bedale, North Yorkshire, with his wife and their daughter and son.