
Media reports printed stills from a video reportedly shot at a barbecue of the local Hellas Fan Club with Baghdatis holding a red flare above his head and chanting anti-Turkish slogans.
Baghdatis later issued a statement saying the video was shot a year ago:
"There has been a lot of coverage of me appearing in a video on YouTube. In that video from 2007, I was supporting the interests of my country Cyprus while protesting against a situation that is not recognized by the United Nations.
"I would like to concentrate on the tournament. I love the Australian Open and want to do well here."
Baghdatis' home island of Cyprus has been a flashpoint of ethnic tensions since winning independence from Britain in 1960. Turkey invaded and occupied part of the island in 1974 in the wake of an attempted coup by Greek Cypriots.
Number 16 Baghdatis beat 2005 champion Marat Safin to reach the third round on Friday. Melbourne's Herald-Sun newspaper later splashed revelations that a cousin of the popular player had been banned for trouble with police earlier this week at the tournament.
Australian Open boss Craig Tiley confirmed that the VIP accreditation had been lifted from Baghdatis' cousin Filos after the man allegedly poured beer on a police officer Tuesday.
But Marcos Baghdatis made sure that his relative was in the stands for his Thursday clash with Safin, giving him one of the tickets at his own disposal.
"When we found out who he was, I contacted Marcos's manager and Marcos," Tiley told the Herald Sun. "I just can't have him on the site as a guest of yours, so I'm pulling his accreditation.
"It was a decision the tournament made because of everything that's going on. I just couldn't afford to have someone who was in any way associated with that to have the kind of access that he had."
The tournament has been on edge since Tuesday when police charged into a crowd of rowdy Greeks during a match, using pepper spray in the crowd and sparking a firestorm of controversy.
That followed last year's mini-riot at Melbourne Park between rival Serbs and Croatians at what was once dubbed "the friendly Slam."
Baghdatis, who lost the 2006 final to Roger Federer while capturing the hearts of Melbourne's huge Greek community, will have a crowd of countrymen on hand when he plays Australian Lleyton Hewitt on Saturday.