Source: Joe Jackson Willing to Step Aside in Custody Case

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The custody case over Michael Jackson's three young children presses on: Friday, a hearing that has been scheduled for next week was postponed until Aug. 3 because the singer's mother, Katherine Jackson, is still assembling her legal team, a source tells PEOPLE. And in another new development, Jackson's father, Joe, whom Michael accused of physical abuse in an interview with Oprah Winfrey in 1993, now says he is willing to step aside to help his wife win guardianship.

"Joe is willing to do whatever it takes to make sure Katherine gets those kids, even if it means stepping aside," says a source close to the family. "He knows he's done nothing wrong, but he's willing to sign papers saying he doesn't live with Katherine and won't be involved in the raising of Michael's kids."

Katherine Jackson, 79, has been awarded temporary custody of Prince Michael Jackson, 12, Paris, 11, and Prince Michael II (Blanket), 7, although Debbie Rowe, Michael's former wife and the biological mother of the two oldest kids, is also said to be vying for custody. (The identity of Blanket's mother has never been revealed.)

A source close to the family tells PEOPLE, "Katherine wants to let everybody know that she's fighting for those children.”

Rowe has reportedly expressed concern about Joe Jackson playing an active role in the raising of the children. Although still married, Joe and Katherine spend most of their time apart; he has a home in Las Vegas and she lives at the family house in Encino, Calif.

Continues the family source: "It's too bad because he loves those grandchildren and they love him. Joe Jackson is being accused of being an abusive person. He's furious about that. And so are the grandkids. They've been crying about it. They know their grandfather isn't like that. He plays with them and has fun with them and they adore him."

• Reporting by HOWARD BREUER