I have been taking paxil for 10 years (never the CR though). It has always worked very well for me. Started out at about 30 or so mg/day - am now down to 10 mg/day. At the full dose, I did not have any anxiety or panic. I did not use any benzos. I consider my A/P mild compared to many here though (my min dose of paxil probable accounts for that!).
My doc had first tried me on zoloft and I went thru what you are describing (I called it a relapse). She felt it was not working for me and switched me to paxil.
Have you tried any other SSRIs? As much as I "endorse" paxil, it may not be the one for you. I've also heard that the CR doesnt work for everyone (even regular paxil users).
I would see if a different med works better. Sorry you are having to go thru this.