The Beatles star was on his way to his offices in central London when the rude cyclist shouted at a woman then nearly knocked over the ‘Let It Be’ singer and other pedestrians.
Paul, 68, confronted the bike rider and mocked him by performing an impromptu dance and shouting: "Ooh I'm so scary, I'm so scary."
Eyewitness, Mark Thorburn, 37, told The Sun newspaper: "The cyclist was telling everyone to f**k off out of his way.
"Paul danced like an elf and put on a squeaky voice to ridicule him. It was the funniest and most surreal thing I've seen."
Paul has also been spreading goodwill to his fellow pop stars, writing a letter of support to singer George Michael while he was recently in prison for driving under the influence of drugs and possession of cannabis.
A source said: “George got the letter and was really chuffed. Paul said he would see him soon and told George to keep his chin up. The letter was two pages long and George read it over and over again."
George was released from jail on Monday (11.10.10) after serving four weeks of an eight-week sentence.