The Crown Prosecution Service took just a day to decide it was not in the public interest to take the teenager to court after he was handed a summons by the City of London police.
The boy was “strongly advised” by officers to get rid of the sign which said “Scientology is not a religion, it is a dangerous cult” at a protest outside the church’s headquarters in the City of London two weeks ago.
He refused and police sent a case file to the CPS. Lawyers have now taken the decision not to prosecute.
This week it emerged the teenager was appealing for help defending his case on an anti-Scientology website.
He had been among demonstrators outside the church’s ?23million headquarters near St Paul’s Cathedral when he was advised to put down his banner.
A policewoman read out section 5 of the Public Order Act which prohibits signs that have representations or words which are threatening, abusive or insulting.
Others in the group agreed not to display their signs but the boy refused and he was issued with a summons.
Police are believed to have taken action against the group after receiving complaints about the demonstration.
The force came under fire last year when it admitted accepting thousands of pounds of hospitality from the Church of Scientology.
Writing on an anti-Scientology website this week, the teenager says: “I need precedents, legal advice, definitions and defences.
“I intend to make a big folder with all the defence you can give me, and in case this does get through to court, I will be well prepared.
“Also, what’s the likelihood I’ll need a lawyer? If I do have to get one, it’ll have to come out of my pocket money.”
Liberty director Shami Chakrabarti this week described the decision to press for a prosecution as “barmy”.
The Church of Scientology, founded by author L Ron Hubbard in the Fifties, teaches that humans are immortal spiritual beings known as thetans, who have passed through previous lives.
Tom Cruise and John Travolta are among its adherents.