The Culture Club singer kindly stepped in when he heard his pal - who tragically passed away last Sunday (23.10.16) at the age of 57 after suffering a "massive cardiac arrest" - had died "absolutely penniless" and his ex-wife Lynne Corlett and husband Michael Simpson were considering setting up a page to allow fans to contribute to the costs of having him laid to rest.
A source told The Sun on Sunday newspaper: "It is very sad, but Pete died absolutely penniless and there is no money for a funeral.
"At one point Lynne and Michael were discussing with Pete's friends setting up a crowdfunding page to pay for it.
"But people were not happy about that as they thought it would be undignified for Pete.
"Pete never really got his life together and was very disorganised which is why there was nothing left.
"When George got wind of this, he offered to pay for the whole thing straight away.
"He told Lynne not to worry and said he would take care of it.
"He thinks she and Michael have enough on their plates and wanted to take this concern away from them.
"It is a very generous gesture - and typical of George.
"As soon as he heard there was a problem he did not hesitate to sort it out.
"He was devastated by the news and Pete was a great friend of his.
"And it is strangely fitting that one Eighties legend should help out another in this way."
A date and venue for the funeral have not yet been set, but it is likely to take place in London in the coming weeks, with a wake at the private Groucho Club in the city.
Frankie Goes to Hollywood singer Holly Johnson and fellow 80s icon Marilyn are expected to be among those at the service.
The source added: "It will be a send-off with style and should be like a who's who of the 1980s."
George, 55, had hailed Pete a "great true eccentric" after news broke of the singer's death.
He tweeted: " "Tearful about the passing of @PeteBurnsICON he was one of our great true eccentrics and such a big part of my life! Wow. Hard to believe! (sic)"