The parents of the 11-year-old boy reported the teacher to police after the incident at Netherhall secondary school in Maryport, Cumbria, a month ago.
The teacher went to the police station voluntarily, where he was fingerprinted, but the charge of common assault was dropped after a brief investigation. The teacher admitted he had struck the boy on the hand during the cookery lesson, but insisted he had done so to stop the child burning himself by opening a hot oven.
David Sibbit, Netherhall head, said initial attempts to persuade the parents the teacher's motives were innocent had failed and the staff member remained shaken by the incident.
Mr Sibbit said: "There was a difference of view over the action the teacher took to remove the child from what was potentially a hazardous situation.
"Clearly teachers can get themselves into difficult situations from time to time when a child is in danger, particularly in practical subjects like design and technology. It is a knife-edge that teachers walk."
The dispute with the parents has now been resolved but Mr Sibbit said: "I think it is sad that there is a tendency now for parents to want to involve the police in such matters. It is partly the fault of the ambulance-chasing lawyers who advertise saying 'Something happened to your child at school? Try to get some compensation!' " Government figures show 960 allegations of abuse were made against teachers last year, mostly involving assault, yet only 30 resulted in a criminal conviction.