Television around the world repeatedly broadcast footage of the reclusive pop star's brief appearance Tuesday at the Hotel Adlon across from Berlin's landmark Brandenburg Gate.
The boy had a white cloth over his head as Jackson held him with one arm around his waist over the edge of the hotel's iron balcony railing.
Fans cheered as Jackson appeared with the child, but the pop star quickly retreated into his hotel room.
The Adlon has received a number of angry telephone calls, says CBS News Reporter Peter Bild, but does not expect Jackson to change his plans and move from the hotel.
The child, wearing a baby blue jumper, was the singer's third and youngest, Prince Michael II, said Antje Sigesmund, a spokeswoman for the Bambi entertainment award ceremony, which Jackson is attending in Berlin.
On Tuesday night, Jackson issued a statement saying he had gotten carried away when fans below the window asked to see the baby.
"I made a terrible mistake," he said. "I got caught up in the excitement of the moment. I would never intentionally endanger the lives of my children."
European media scolded Jackson for the incident, with Berlin's BZ daily calling his behavior "foolish." Sweden's Expressen headlined its story "Jackson plays with the baby's life."
In Britain, Jackson was chastised in The Sun tabloid under the headline "You lunatic" and in the Daily Mirror as "Mad bad dad."
"The Berlin police should arrest this negligent father for reckless endangerment of his own child," said an editorial by Mirror show business editor Kevin O'Sullivan.
Berlin prosecutors said they were not investigating the incident, although an inquiry could be opened if a complaint was filed.
Promoters of Thursday's Bambi ceremony, during which Jackson will receive a lifetime achievement award, played down the flap.
"Some people obviously found it strange, but that's why Michael Jackson has given an explanation for the incident," said Patricia Riekel, editor of celebrity magazine Bunte and a board member at publisher Burda, which organizes the Bambis.
"I thought it was a very spontaneous action and he loves children. I don't think it was dangerous," Riekel said at a news conference on the awards.
On Wednesday, teenage fans still crowded the pavement in front of the luxury hotel, hoping to glimpse Jackson and breaking into intermittent screams of excitement even though Jackson was nowhere in sight.
"It was rather bizarre, what he did," said 17-year-old Joerg Diestel of Berlin. "But Michael's a bizarre person."
Maria Hunyadi, 15, from Budapest, Hungary, said, "I thought it was dangerous, but he probably did it spontaneously."
Uta Nierlein, a 16-year-old fan from Berlin, said, "If I had a child I wouldn't hang him out of the window like that."
The Chicago-based advocacy group Prevent Child Abuse America criticized Jackson's behavior, though it said the boy did not appear to be harmed.
"It is a painful reminder that even the most well-intentioned among us sometimes act in ways that put children in danger of being abused or neglected," said A. Sidney Johnson, president and CEO of the group.
Little is known about Prince Michael II. People Magazine reported in August that he was six months old. The magazine, citing an anonymous friend, said the boy was not adopted and did not identify the mother.
The singer also has two children with ex-wife Debbie Rowe: a 5-year-old boy — also named Prince Michael — and a 4-year-old girl, Paris. The couple divorced in 1999.
In Berlin, Jackson was taking a break from a California courtroom where he testified last week in a $21 million lawsuit claiming he backed out of concerts. Bild reports Jackson (or a double) was seen buying a copy of the movie "E.T." in a video store.
He will attend a benefit for homeless children and a charity auction where he will put a jacket and hat on the block Wednesday.