The witness was detained after police officers found no evidence to corroborate his claims.
He told police he saw a six to seven-year-old child being taken into a black Volkswagen Transporter on Thursday in Redhill, Surrey.
Surrey Police had initially said: “This is an incident we are taking extremely seriously”.
A bicycle found at the scene that was believed to belong to the child was later discounted from the investigation after a local landlord admitted he had dumped it there.
The police force released images of the van and made a number of public appeals for information.
But after re-interviewing the man, it became clear the abduction may not have happened.
Detective Superintendent Fulton, the senior investigating officer, said: “There has been no report of any missing child in connection with the case and we have carried out extensive enquiries.
“These have included reviewing hours of CCTV from across the area, carrying out house to house enquiries, talking to commuters at the railway station, checking potential vehicles matching the description and missing children databases, receiving more than 100 calls from members of the public in less than 24 hours, all of which takes a significant amount of time.
“Once again we are extremely grateful for the support from the public and the media.”
Police even launched forensic investigations and deployed a helicopter to help discover what happened.
“Officers had no reason to disbelieve the account of the witness and had to act quickly in order to prevent what was suspected to be a risk to the life of a child,” Surrey Police said in a statement.
Detective Superintendent Fulton, explained the force’s urgency: “The risk to life and safeguarding children are our first priorities when presented with a report like this which is why we took the course of action we did.
“Time was of the essence which is why we asked for help from the public and media to find out what happened as soon as we could.
“Reports of this nature are extremely rare and we are sure the public understand that when information such as this is received we treat it extremely seriously and must do all we can to find out investigate what’s happened.
“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.”