A cock and bull story is a false account or tall tale - from old English 'a concocted and bully story'; 'concocted' was commonly shortened to 'cock', and 'bully' meant 'exaggerated' (leading to bull-rush and bull-frog; probably from 'bullen', Danish for exaggerated); also the old London Road at Stony Stratford near Northampton, England has two old inns next to each other, called The Cock and The Bull; travellers' stories were said to have been picked up on the way at the Cock and Bull. Another source is the mythological fables of Nergal and Osiris; 'Nergal' the ancient Persian idol means 'dung-hill cock; 'Osiris' was an Egyptian Bull.

Perhaps there is no identifiable origin, but I suggest that this saying is much older than it appears. Witty sayings of this nature indubitably circulated orally for any amount of time before they were recorded or used in a written way: this one could be anywhere between 700 or 2000 years old. (I suscribe to the Ancient Greek or Roman theory.) A number of 17th century English proverbs refer to the cock or cockerel who makes a lot of noise, but achieves little by doing so. Each of these proverbs has regional variations: one of interest to your question remarks to the effect that 'the cock sat on the midden, and told the bull a story'. The midden of course was a manure or household refuse pile, and the implication seems to be that the cock was full of nonsense, but the bull was happy to listen.Tilley's 'Proverbs of the Seventeenth Century' gives fuller examples, and examples of the way the says were used. Remembering that 17th century culture was shared over Europe as well as exported to the American settlements, it is unsurprising but interesting that most of us comprehend the meaning of this saying: it demonstrates the enduring power of oral wisdom.

You can actually "see" the answer to your question here: http://www.youtube.com/watch?v=P3K5DyRMF-w

It is widely reported that the phrase originated at Stony Stratford ('the jewel of Milton Keynes'), Buckinghamshire, England. Visitors to Milton Keynes might feel the bar for 'jewel' status is set rather low in that region, although Stony Stratford is indeed a rather pleasant town. Coaches between London and Birmingham changed horses in the town at two of the main coaching inns - the Cock and the Bull. The banter of the rival groups of travellers, from England's two largest cities, resulted in exaggerated and fanciful stories. The story is plausible but there's no real evidence to support it, although the two hostelries did, and still do, exist. Don't mentioned this in Stony Stratford if you want to get out alive, but it's more likely that the phrase comes from old folk tales that featured magical animals. The French term "coq-a-l'ane" has the same meaning. This was later taken up in Scots as "cockalayne", again with the same meaning. The first citation in English is from Robert Burton's The anatomy of melancholy, 1621: "Some mens whole delight is to talk of a Cock and Bull over a pot." This lends support to the view that the stories were about cocks and bulls, i.e. fanciful tales, rather than stories told in the Cock or the Bull. The early date doesn't rule out the coaching inn story though, as they were both in business prior to 1651. There doesn't seem to be a direct link from 'cock and bull' to 'bull' (or bullshit), meaning rubbish or nonsense, which is a 20th US term. Bull is associated with made up stories from around the date of the earliest 'cock and bull' citation though, as in this quotation from J. Taylor, 1630: "Wit and Mirth ... Made vp, and fashioned into Clinches, Bulls, Quirkes, Yerkes, Quips, and Ierkes." http://www.phrases.org.uk/meanings/cock%20and%20bull%20story.html A corruption of a concocted and bully story. The catch-pennies hawked about the streets are still called cocks—i.e. concocted things. Bully is the Danish bullen (exaggerated), our bull-rush (an exaggerated rush), bull-frog, etc. 1 Another etymology may be suggested The idol Nergal was the most common idol of the ancient Phœnicians, Indians, and Persians, and Nergal means a dunghill cock. The Egyptian bull is equally notorious under the name of Osi’ris. A cock-and-bull story may therefore mean a myth, in reference to the mythological fables of Nergal and Osiris. 2 The French equivalents are faire un coq à l’âne and un conie de ma mère l’oie (a mother goose tale). http://www.bartleby.com/81/3772.html

but it is not for childrens ears.