The 10-year-old son of Crown Prince Frederik was saved last Thursday by a lifeguard on the popular Gold Coast strip, 7News reports.
He was reportedly pulled from the surf at Mermaid Beach after being caught in a rip current.
The lifeguard, Nick Malcolm, was personally thanked by the Crown Prince.
Danish officials played down the incident on Monday, insisting the prince was at no point in danger.
But Stuart Keay, Mr Malcolm's supervisor, told reporters the young prince might well have died without the lifeguard's intervention.
"We got him before it got too serious but he wouldn't have come back in," Mr Keay said.
Another colleague said the lifeguard was completely unaware of the boy's identity and was not used to all the subsequent attention.
Prince Christian, the second in line to Denmark's throne, has been rescued after getting into trouble in the waves at an Australian beach, reports say.