The arrest of a 26-year-old local man follows a claim a boy was "taken" into a van in Redhill on Thursday.
But Surrey Police said "an extensive and thorough investigation" had not found evidence to support the story.
The force added: "We had to act quickly to prevent what was suspected to be a risk to a child's life."
The victim was described as white, about 4ft (1.2m) tall and wearing a red T-shirt and navy blue jeans.
He was said to be "taken against his will" but no parent reported a child matching the description as being missing.
On Friday, Supt Chris Edwards of Surrey Police said he was "completely satisfied" with the credibility of the witness.
But in a statement, the force said that after re-interviewing the man at length, and as a result of its inquires, "no further information has come to light to corroborate the report".
The senior investigating officer, Det Supt Pete Fulton, said officers had reviewed hours of CCTV from across the area, carried out house-to-house enquiries, talked to commuters at a railway station and checked potential vehicles matching the description.
He said missing children databases were checked and police received more than 100 calls from members of the public in fewer than 24 hours, "all of which takes a significant amount of time".
He said: "We are the sure the public understands that when information such as this is received we treat it extremely seriously and must do all we can to investigate what's happened."
The owner of a van pictured in a CCTV image and initially circulated by police was traced and ruled out of the inquiry.
A bicycle said to be left by the roadside after the alleged abduction was also later revealed to belong to an unconnected person, police said.
Det Sup Fulton said: "It is understandable this has caused a considerable amount of concern and confusion in the area which will last beyond just these few days.
"We will continue to work with the community and realise that this has been disruptive and had a large impact, however I hope that you are reassured that we take your safety extremely seriously."
The arrested man was released on bail.
Police investigating the reported abduction of a child in Surrey have arrested a man on suspicion of perverting the course of justice.