The News of the World is believed to be planning a photo spread this week which conclusively "outs" Michael.
The pictures show him in the company of a close male friend, including some of him sunbathing bare-chested in the Will Rogers Memorial Park and even about to enter the lavatory, it was reported.
The newspaper acquired the photographs for an estimated $50,000 last year, on some accounts via All Action, a London agency, acting on behalf of two Hollywood paparazzi. But they were held back after the death of Diana, Princess of Wales, a close friend and fan of the singer.
Michael, 34, was arrested on Tuesday afternoon by an undercover officer. He gave his real name, Georgios Kyriacos Panayiotou. Officers did not recognise him until they booked him at the station, when he listed his stage name under "other names used" and "singer" as his occupation.
Released three hours later on $500 bail, apparently before reporters were tipped off about the arrest, he made use of the time to pull an effective vanishing act.
There was no sign of him at the Beverly Hills address he gave to police. On some accounts he was sheltering at the home of the Hollywood record producer David Geffen.
As news of the photographs emerged, Beverly Hills police said the arrest occurred after recent complaints of lewd conduct at the park, and was not aimed at netting Michael. A five-acre park of koi ponds and palm trees at the junction of three busy streets, just across Sunset Boulevard from the Beverly Hills Hotel, the park is hardly a private setting.
"It's not something you'd expect up there," said Lieutenant Edward Kreins. "It's pretty much a park where you'd relax, read a book, and get some wedding photos taken."
In 1997, Beverly Hills police made 21 arrests for lewd conduct, but only two at Will Rogers Park. Police have refused to release details of the arrest, saying only that Michael was "observed" in lewd conduct when a plain-clothes officer entered the lavatory.
A full account may emerge from the arrest report or affidavit, however, before a scheduled court hearing on 5 May.