O'Connor signed a short-term deal in November after impressing with the reserves, but has failed to make more of an impact on the coaching staff at Glanny Park since then.
"We felt he had a little bit of something, but e have decided after this period that he falls short of what we require," Laws told the club's official website.
"That is why we are letting him go. When a player is on trial you expect them to give their right arm to impress, but we didn't feel we got the desire needed for us to keep him at the club so we relieved him of any responsibility.
"We wish him good luck, but he will have to make chances in his attitude if he is to rekindle anything in professional football."
He made three substitute appearances for United, and is expected to return to Ilkeston Town.