If there's insufficient evidence to proceed with a case the CPS must drop it (or the judge must throw it out of court).
However the CPS has a policy of proceeding with domestic violence cases even when the victim withdraws their statement. (They can still use the original statement as evidence, together with things like photographs of any injuries). The policy is there to protect victims from being threatened to withdraw their statement.
When a person alleges that someone else has assaulted them and then withdraws that allegation, the CPS will examine the likely reason for that withdrawal. If they're confident that the assault never took place, they'll consider charging the person who made the allegation with 'wasting police time'. If they believe that the assault really did take place, and that the person is only withdrawing their statement in order to protect the assailant, the charge would be 'attempting to pervert the course of justice'. (See here for an example of the possible consequences of withdrawing evidence about a genuine offence:
http://www.bbc.co.uk/...es-mid-wales-11707903 ).
Chris