"He has spoken with the authorities, and has gone back on his decision to quit," Bonifacio Manga Obiang told AFP. "He is the coach again. His contract runs until the end of the Africa Cup of Nations."
Manga Obiang added that Michel had blamed "external interference for his decision, but had since been given guarantees".
Equatorial Guinea are co-hosts of the 2012 CAF Africa Cup of Nations along with Gabon, and Michel has been handed the task of taking the team beyond the competition's group stages.
That will not be easy for a nation ranked 152nd in the FIFA/Coca-Cola World Ranking, and who will be playing in the tournament finals for the first time.
The draw for the finals will be held tomorrow in Malabo, with Ghana and Côte d'Ivoire joining the co-hosts as the top seeds.
Continental heavyweights and defending champions Egypt, South Africa, Algeria, Nigeria and Cameroon have all failed to qualify for the tournament.