Michelle has been at the centre of a race row in 'Ultimate Big Brother'.
The glamour model - who appeared in 'Big Brother 5' - was called into the Diary Room for using "offensive language" after she had a conversation with Nick, Victor and Brian about their outfits.
Looking them up and down, the 29-year-old glamour model said: "It's blacks and all sorts night tonight."
As the group looked uneasy, Brian joked: "It's gays, blacks, villains and divas night."
Despite no one complaining about the comments, Michelle was called into the Diary Room by Big Brother and reprimanded for her language.
A shocked Michelle then stormed out of the private room, insisting she was not racist.
She said: "I didn't say any abusive words. I used the correct terminology and I only said it because you said it and Victor said it."
Brian - who is openly gay - also backed up Michelle, claiming the group were being "silly".
He said: "Oh my God, that was just us being silly. We were just joking. Michelle you've got nothing to worry about. I wasn't offended by it because I said it, too. I don't think it's that bad."
Ulrika later suggested the show was trying to "cover" themselves following the race issues that dogged 'Celebrity Big Brother' in 2007 with Jade Goody and Shilpa Shetty.
She said: "They want to cover their a**es. They can't have anything upsetting the last series."
Michelle was clearly upset by the incident, and later confided in her housemates that she was feeling "lonely" and missed her fiance Steven.
Discussing another visit to the Diary Room, she told Nadia and Makosi: "They knew I was feeling upset, and that's why they called me in.
"I was just feeling sentimental or lonely or out of place, and you and Makosi had your situations. I haven't felt that c**p for a long time.
"I miss Steven and I miss my home and I miss my life."