What would you do if...

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you find out that your friend who's friendship you really valued turned out to be a lying biatch. And she has been pitting you with other friends. She would tell you things you thought was said in confidence about someone and what that someone told about you, not really very nice things, and in turn she would also tell that someone that you said something about them, even if you didn't and in turn you would somehow hold a grudge over that other person and that person will hold a grudge against you. And I think she does this with everyone. I thought it was just a fluke when she told me that one co worker said something and when I asked that co worker if she said something like that or to that effect, she vehemently denied. at first I thought I was just a mistake. But one of our friends confronted me and asked me why I thought she was like this or like that.. I was shocked coz I know I never said anything like that and I asked her where she got her news from, at first she refused to tell me, and since we were talking about what the other supposedly said about each other, and I was having my doubts since we only have 1 friend in common who would be 'close enough' to be able to talk to us about things ahm shall we say intimate. I asked her why she said this and that about me and the look on her face told it all. So we talked and we realized that we've been played for fools, that this person we thought and considered to our friend was saying all those things or provoking us to say something bad about each other by saying that we said something bad about the other and you wouldn't really notice it, since she does it so well. You would think you would just be airing out a grievance would get blown out of proportion coz she would double your anger and triple your grief. Right now, I refuse to talk to this person coz I fear that I might lose my temper and do something or say something I might regret later. But part of me wants to let her know that we're onto her and that she's been discovered and that she hurt me and she hurt our friend and if she doesn't stop she might end up hurting more people or worse yet herself... Right now I'm at a lose, coz I really treasured our friendship which turned out to be a sham. Do you think I should talk to her? Or continue what I'm doing and just forget I ever met her.