Judging from the tone of your post, I'm not convinced that you're ready to let this one go. My sneaking suspicion is that you're just going to become less available to her until she starts chasing you...then, it'll be back to business as usual.
If you really want to break up with her, it's not that hard and it certainly won't have negative repercussions on your social life. Sure, her friends will naturally jump to her side initially, but if anything, deep down they will see you as MORE attractive and less attainable than before. Girls (or perhaps people in general) just don't have as much loyalty to their friends as they would like others to believe. Just give her the requisite time by herself and "girls' night out"s to get over it and it'll blow over.
"Walking away" works best if there isn't an established relationship, but if it's been going on for months, you need to tell her what's up. Let her down easy--you can even give an "LJBF"--but make sure she knows it's over and don't give her false hope...otherwise she'll be sure to act on it.
Don't overthink this and psyche yourself out...you've come to the conclusion she's a waste of your time, now give her the ol' heave-ho