Christie is accused of punching Miss Manchester Jones in the face.
The row erupted over her boyfriend and Christie was wearing an angel costume at the time.
"Due to the media attention following the allegations against her, Rachel Christie has now decided to withdraw from the Miss World competition and relinquish her Miss England crown," the pageant organisers said in a statement on the Miss England website.
She's now on bail and is said to be concentrating on her career as an athlete.
"Rachel will concentrate on clearing her name and focus on training for the 2012 Olympics until this case is resolved," they said.
Christie is the niece of British Olympic sprinter Linford Christie.