Solution to get rid of the forced iOS7 source file.

This worked fo me and I hope it frees up space on your devices where you do not want to upgrade to iOS7.

1) Back up your device on a mac / pc using iTunes. (The source file will also get backed up)

2) Disconnect your device from the computer and do a reboot by pressing the power button till you see the slider - then slide to off. Wait for several seconds after the device shuts down and power on again. You may have to do this reboot 2-3 times till the iOS7 file disappears.

3) Go to iTunes "devices" and delete the backup and take a fresh backup.

It worked for me as I have got back my free space. Hope this helps all those who want to get rid of iOS7 sitting in the "other" (yellow) folder.

Thanks.