Testifying in a $1.5 million breach of contract suit filed by his former video producer, Marc Schaffel, Jackson said that discovering that Schaffel had directed a gay porn film had caused him to break their professional relationship.

In a pre-recorded sworn testimony, the Santa Monica Superior court heard the singer’s reaction to this discovery.

“I was shocked by what I saw”, he said.

He described Mr Schaffel directing the shoot; ” he was telling one what to do with the other and he grabbed their penis or something.”

Following this discovery, Jackson told his advisers to sever all ties with the film maker.

He told the court that he thought Mr Schaffel’s association with “that circle” might not go down very well with “mothers”.

The star, who has been twice accuse and cleared of sexually molesting teenage boys, worried that further association with Mr Schaffel would be damaging to his career and image.

Jackson is no stranger to pornography himself – police found several heterosexual porn magazines and DVDs in the singer’s house when they searched it in November 2003 before his arrest on child molestation charges. Jackson seemed shocked by his former business partner’s actions; “I didn’t believe it!”

Mr Schaffel’s Lawyer, Howard King wondered if the fact that the film was “gay-themed” had particularly offended Jackson.

In earlier discussions, Mr King had warned the singer that Mr Schaffel was prepared to reveal “their intimate discussions” and discuss “Jackson’s sexual proclivities.” One of these “intimate” secrets concerns a $300,000 cash payment that was apparently secretly made to a “Mr X” in Argentina.

The New York Daily News describes this as a “very private transaction of a very sensitive nature for Mr. Jackson,” that was not recorded “in his business ledger at the time because it was during the criminal matter.”