It seems you have several Skype accounts (registered with your email address). You have used the PayPal account on another Skype account already, so it's currently not possible to use it for a second Skype account. To use PayPal, you can use your old Skype account, or use a different payment method for your current Skype account.
It's unfortunately not possible to delete an association between a Skype and a PayPal account, even if you delete the Skype account you previously used the PayPal account for. So deleting the previous Skype account will not help in this case.