The bout between the boys, aged eight and nine, took place at Greenlands Labour Club in Preston, Lancs, in front of a 250-strong adult audience on September 10.
But a spokesman for Lancashire Police said today the force had "looked into this matter fully and there are no issues for us to pursue", the Daily Telegraph reports.
A 10-minute video of the fight captured one of the boys crying during the event. Paramedics were brought into the ring to assess the boys, who were not wearing any head gear or padding, it reports.
The video also featured a scantily clad ring girl parading between rounds.
At one point, one of the young boys featured appears to be crying, and paramedics are brought into the ring to assess the youngsters, who were not wearing head gear or padding.
A fight between two boys watched by adults at a cage-fighting event has been described as "very barbaric" by the Culture Secretary Jeremy Hunt, BBC reports.
"Getting more young people doing sport is great but I do ask myself whether it really does have to be in a cage," Mr Hunt said.
"It just feels to me, it feels very barbaric and I know there are concerns about children that young doing a sport like that.
"I think if adults choose to do it, that's one thing. I suppose I do share some of the shock."
The Daily Telegraph reports:
The packed crowd can be heard whooping as the two children wrestle each other in headlocks on the floor of the cage, while others can be heard cheering their names in encouragement.
In one of the last bouts the smaller looking boy is repeatedly kicked in the head while his arm is twisted by the other young competitor.
The violent sport, also known as "Mixed Martial Arts", combines martial arts, wrestling and boxing but with few rules. Contestants are allowed to punch, kick and elbow each other into submission, however biting and eye-gouging would see a contestant disqualified.
A spokesman for the British Medical Association, said it was opposed to boxing and cage fighting.
“This example of cage fighting among young children is particularly disturbing, especially as they are not even wearing head guards.
Chris Cloke, Head of Child Protection Awareness at the NSPCC, said he would not want parents to enter their child into such a competition.
"It's quite disturbing that some of those involved in the bouts were as young as eight, an age when they are still developing, physically and mentally.
"The organizers of these activities should think very carefully before allowing children to be involved when they are egged on to inflict violence," he told the Daily Telegraph.
Event organizer Steven Nightingale, 28, said the sport was safe and growing in popularity, it reports.
"Competitions start from the age of five, it is definitely a big up-and-coming sport. It is all based around martial arts.
"The kids are not getting hit or anything at all when they are under age. We do not let them strike - punch and kick - until the age of 14 or 15."