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![image: [ Gascoigne: could still face action by the SFA ]](/olmedia/images/_46264_gazz300.jpg)
Gascoigne, who plays for Rangers, pretended to play the flute, a Loyalist symbol, in front of the traditionally Catholic Celtic supporters.
Rangers manager Walter Smith confirmed Gascoigne had been disciplined but refused to say what that punishment entailed.
Speaking to BBC Scotland, Smith said: "All these things are disappointing from our own point of view. We always try to handle them internally.
"Paul Gascoigne has served us well over the couple of years he has been here and is one of the main reasons we have won the championship over that period.
"There are always bits and pieces of him that let him down now and again and that one was another story.
"It was dealt with internally as indeed have all the other indiscretions in the past."
It is thought Gascoigne would have been fined two weeks wages, believed to be in the region of £40,000.
The Scottish Football Association's Chief Executive, Jim Farry, had threatened to take action against the player and his club if Rangers did not discipline him.
Mr Farry said: "Gascoigne's action was unprofessional and inflammatory.
"We have a duty to preserve the image of the game and if it suffers we can intervene. Our powers include suspensions and fines, both for clubs and individual players."
Gascoigne, who had been named as substitute in the Old Firm match against Celtic, was caught on camera, impersonating a flute player as he warmed up in the second half.
It was the second time he had mimed flute-playing actions. Gascoigne first incensed Celtic fans early in his Rangers career.
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