Despite winning their group and showing consistent form in Europe's elite competition, United are out of the Premier League title race and both domestic cups.
"Their Premier League situation could be an incentive to them or it could be a burden on their shoulders, we know there's lots at stake for Manchester United in this match," Spaniard Michel told reporters on Monday.
"United cannot afford any mistakes tomorrow given their position in the Premier League."
Despite being without main forward Javier Saviola after the former Argentina man picked up a leg injury in Saturday's 4-0 Greek Super League win at OFI Crete, Michel is optimistic the hosts can make history by beating United for the first time.
"We are delighted to be at this stage of the competition. It's a big prize for us so we won't give anything away and we have great expectations," the 50-year-old said.
"Of course experience counts but I think it's actually an advantage that a lot of our players don't have experience at this level. The passion we have displayed to get here will guide us and with all due respect we can create problems for United."
Saviola's absence means 21-year-old Nigerian striker Michael Olaitan, who has scored eight times in 15 appearances this season, is likely to start up front with Argentine attacking midfielder Alejandro Dominguez playing just behind.
United boss David Moyes is banking on the form of his fit-again strikers Robin van Persie and Wayne Rooney, who come into the match having both scored in Saturday's 2-0 win at Crystal Palace.
Rooney also boosted United by pledging his long-term future to the club last week, signing until June 2019 before scoring a superb goal against Palace.
"I think both Rooney and Van Persie are back in really good shape and they're scoring goals, and in the big games we can do far better when they are with us," said Moyes.
"To win the group has given us an added edge, but we still have to play well to qualify. We have an opportunity to try and win a competition, if possible, but we first have to get through this tie."
For his part, Rooney revealed that he would love nothing more than to celebrate his new contract by claiming a second Champions League winner's medal.
"One is never enough, especially at this club," he said, referring to their 2008 triumph.
"The feeling you get when you win it is incredible, so there is no way that you want to stop."
Rooney added: "I want to be remembered as a winner. That's what we aim to do - win trophies - so that's what you'll be judged on when you finish your career. That's not just me - that's the whole team."
- Sports & Recreation
- Manchester United
- Premier League
- Javier Saviola
- Wayne Rooney