George Michael faces being dropped by his record label after being found slumped at the wheel of his car for the second time this year.

The gay singer was found asleep at the wheel of his BMW while stopping at a traffic light in a North London suburb on Sunday and was later arrested on suspicion of drug possession.

Michael has insisted he does not have a drug problem but record bosses at Sony/BMG are reported to be worried about his erratic behaviour in a year where he has twice been caught asleep at the wheel and paid £15,000 in damages to three vehicle owners after causing a three car pile up in May.

A Scotland Yard spokesperson said of last weekend’s incident, “At approximately 3:22 am on Sunday morning officers were informed of a stationary vehicle with a driver inside causing an obstruction at traffic lights.

“Officers arrested a 43-year-old man on suspicion of being unfit to drive and possession of a controlled substance believed to be cannabis.”

A spokesman for the record company who have paid millions for the artist’s current 50 date world tour, told the Evening Standard that he risks losing his fan base, “He is drawing attention to himself by his increasingly erratic behaviour.

“He is an adult and free to behave how he likes, but he must remember that the more indiscreet he is, the more he will be caught out. That is twice now he has been found slumped unconscious behind the wheel. He has also been photographed coming out of the woods with a grey-haired stranger in the middle of the night after some dodgy sexual encounter.

“None of this looks very good to his fans. He just doesn’t appear to care what people think of him – it’s exasperating.

The singer was released on bail until November.