Anna Nicole Baby Shocker

10/23/2006 4:54 PM PDT

Anna Nicole Baby Shocker

TMZ has learned that Anna Nicole Smith confessed during her pregnancy that Larry Birkhead was the father of her baby.

Sources tell TMZ that late last year, Anna Nicole began having sexual relations with Gaither Ben Thompson, a wealthy real estate developer in Myrtle Beach, South Carolina. We're told that Howard K. Stern, the lawyer who claims to be the father of Anna Nicole's newborn baby, was in Myrtle Beach during the time Anna Nicole was seeing Thompson. Remember, Stern has said he had a long-term relationship with Anna Nicole, which seems odd given that Stern accompanied Smith to Myrtle Beach.

Sources say in May of this year, Anna Nicole contacted Thompson to say that he was the father of her soon-to-be-born baby girl. It's especially interesting because we're told that Anna Nicole had contacted people familiar with Thompson inquiring about his wealth. That's when Thompson dropped a bombshell -- that it was impossible for him to father a baby because he had already had a vasectomy. Days later, sources say Anna Nicole confessed to Thompson that Larry Birkhead was the father. Birkhead, an entertainment photographer who had a relationship with Anna Nicole, has filed legal papers in Los Angeles to establish paternity.

And there's a new twist to this story. Anna Nicole and Howard K. Stern have been staying in one of Thompson's houses in the Bahamas. Anna Nicole has established legal residency in the Bahamas under the premise that she owned a home. Tracy Ferguson, Thompson's lawyer, tells TMZ that her client sold one of his homes to Anna Nicole on credit, but she has never been paid a cent. Ferguson says Anna Nicole is in default and Thompson wants her out.

If the Bahamian government believes the alleged home purchase was a scam to gain residency, Anna Nicole could be deported.

Howard K. Stern, Anna's lawyer and rep, could not be reached for comment.