The army of officers was called after a row broke out when a woman, 27, accused Pascoe Petgrave of stealing the tenner from an HSBC bank machine in Thornton Heath, south London.
Pascoe, who stands at just 4ft 7in, said he had been given his mum's bank card to withdraw money when he spotted the note - but the woman who had been nearby claimed it belonged to her.
Pascoe's cousins - two women aged 21 and 28 - stepped in to stand up for him and a large crowd gathered before the trio were arrested on suspicion of theft.
The boy's mother Maxine, a 38-year-old nurse, who was called to the scene by the cousins, then watched in astonishment as her son was handcuffed and taken into police custody. All three cousins have since been bailed while enquiries continue.
When asked why 50 officers had been present, a police spokesman said: Police attended the scene and during the course of investigating the matter, a large crowd had gathered. Elements of this crowd were hostile to police activity which resulted in a call for further assistance being made. That was answered by other colleagues, who subsequently attended.'
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