Most people have lost a close friend, whether that loss was by choice or because of a friendship-breaking incident. Losing a friend can be as painful as a divorce, and if the friendship was a close one, ending the friendship requires as much thought and preparation. One way to explain your rationale for ending the friendship and sort out your feelings at the same time is to write your friend a letter explaining what happened and why you wish to sever your relationship.
Write "Dear (first name)," followed by a comma or a colon. Don't worry about proper letter format; this is an informal letter.
Tell your friend sincerely how you feel. Avoid accusations or name-calling, even if the situation with your friend merits these reactions. Your friend is unlikely to continue reading if your tone is irate and your words are inflammatory. Instead, tell your friend about your feelings and use "I" statements to help her see the situation from your point of view.
Explain that because of what transpired, you no longer wish to remain friends with her. Apologise for stating this in a letter, if appropriate, and state your reasons for sending a letter instead of telling her in person. If you will have to come into contact with her in other situations, lay some ground rules. State that you will be cordial and not bring up the matter in public, or however you prefer to handle the situation.
Sign your name and mail the letter or drop it off personally. Do not have anyone else drop it off for you; be professional and keep the matter between the two of you.
Keep the letter brief and to the point so as to avoid making the situation worse or more painful than it already is.