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I will return to you shortly as I need to move to a location with better internet connection.
You can invite them to admit the claim as mentioned and if admitted you will consider withdrawing the application. That said If you withdraw claim as suggested then you may be shooting your self in the foot because then you may not be able to recover your costs spent on bringing the claim and any compensation for what you put the claim in for.
You can add that to your compensation offer. Therefore what you should you be saying is settling the claim instead of withdrawing the claim as withdrawal means you do not wish to proceed with it anymore.
Do you understand what I have stated if not please let me know