Hey there, I have a friend who was in a similar situation to yours. He wanted to drop physics and use his grade in French A-level instead of physics as his 3rd A level. However most sixth forms won't allow you to continue your study with only two A levels, so he is going to be entered for the Physics exams anyway but just won't study for them or even bother in the exams, as he doesn't need the grade. What I recommend is sitting the English Lit exams but just not studying for them, do the homework half-assed and just spend as little time as possible on the subject so you can focus on Arabic - which you believe you can get a better grade in. I highly doubt your sixth form will expel you for performing poorly in a subject; people get E's and U's all the time.
Don't listen to those saying that you'll have a hard time applying to unis. It's BS. He got 4 offers with average AS grades (B's and C's) and has an offer to study Chemical Engineering at Nottingham. Most universities will accept a language. You may have to call or send them an email if they do not understand your situation at first though - then they should be happy to accept Arabic as a 3rd A level....
...so my recommendation is to take up Arabic. Spend as little time as possible on English until it's at the point where they can actually take disciplinary action against you, and don't worry about unis accepting it or not.
I hope things work out!
Best of luck.