To throw up the sponge

to give up a contest; to acknowledge defeat; - from a custom of the prize ring, the person employed to sponge a pugilist between rounds throwing his sponge in the air in token of defeat; - now, throw in the towel is more common, and has the same origin and meaning.

See also: Sponge

Webster's Revised Unabridged Dictionary, published 1913 by G. & C. Merriam Co.