I'm abit speechless on this thread after reading all that. Not because I'm shocked, it's just that it all seems like way too much drama, go for the simplistic view on life..

If you're confronted on what's happening with you and her, then tell her you're staying single and apologize if you have led her on but you want to keep her as a friend in your life..

If your ex does find out, like you rightly said, fuck her.
If anything, get the ex out of your life completely. It NEVER helps (in my opinion)