How to prevent an OTA update from being installed?
The dirty way to do that is to fillup your internal storage with several copies of any 100mb file. 

As soon you are low in free space (here is about 400 to 500) that popup with the big install button will show no more, but even if it does, it wont be able to proceed.
This seems to work better after a reboot. The message with install button seems gone now!

And If you need some space, just delete some of these temp files.