Mr McCready said Ms Bailey approached him through Unite Union last week after he began a private prosecution against Mr Key.
"She didn't want [the case] to proceed," he said.
"The union did say she might want to do it some time in the future, but she didn't want to do it now."
Mr McCready, a former accountant who also took a prosecution against former Act leader John Banks, refused to drop his case.
"We don't take instructions from anybody," he said. "The victim … asked me to withdraw it and I politely and sternly refused."
Mr McCready filed papers in the Auckland District Court last week, alleging that Mr Key assaulted Ms Bailey.
The waitress is meeting with Unite Union tomorrow to decide whether to take legal action herself.
In an anonymous post on the website The Daily Blog, Ms Bailey said the Prime Minister had repeatedly tugged on her ponytail during regular visits to Rosie Café in Parnell, where she worked.
Mr Key continued to pull her hair despite her telling him to stop, and he later apologised by giving her two bottles of wine.
Mr Key told Radio New Zealand this morning that he had sought legal advice on the incident.
He said he misread the situation and regretted it, but rejected accusations of sexism and said he could have also done the same thing to a man.
By Isaac Davison of the New Zealand Herald
