How can I stop being scared of my friend?

Well I have this "best friend" (Quotes since i hate her now) who last year started talking to me and one day she asked to come to my house. Now we are 'best friends'. She is evil. She tells rumors about me to everyone, and denies she did but I know she did because even if she thinks I am one, I am not a idiot. She always says to me "Do this" or "Do that", and if I say no she shouts at me. She always says bad things about my other friend Holly (not her real name) and doesn't talk to me if I play with this friend. She mostly bullies Sky (Not her real name), and always shouts at her, telling her to do bad things, lying, and many other things. Sky is a very shy, weak girl, weaker than me, which is why she bears with Fluffbrain (As I shall call her). Sky and Holly are good friends, and Fluffbrain is always telling her to shout at Holly and stop being friends with her, She spreads bad rumors about Holly. Fluffbrain always gives me gifts, once even giving me her old phone (Which was so annoying one night I threw it at the door when I was half asleep, and the next day I told her I lost it, and she got pissed at me), so if I stop being friends with her she will take this to the principle. Whenever friends have a fight the school always has to budge in and make people friends again. She tends to insult my parents, since they have a few physical problems (My dad has multiple sclerosis while my mom had a face disease making her get a distorted face) and since everyone else laughed at me for having such weird parents I have to pretend I hate them. I told my mom all this besides hating my parents, and she told me to stop being a pussy and face the fight, but I can't, since I am such a wimp. I have always been quite weak, and from experiences before, I have learnt that it is better to handle everything than confront them. Which is true. She could destroy my life, making rumors about me, and telling my secrets. And we would have to be friends sooner or later because my school barges into our business and makes us friends again. Or else we get sent to the head principle, and probably saturday detention. Because of last year of something between fluffbrain and Holly, she has been going to the counscellor, and often told her millions of things about everyone and Holly, 1/3 of it lies. I hate telling my weaknesses and things in my life to other kids and mostly adults, since I tend not to trust adults (And they get paid for this, so trusting them isn't really that useful). Now she has started copying me, even to the extent of naming her email account the same as me. She got my facebook password out and now uses my account for annoying others, and when I change the password she makes me spit it out again. I'm scared of her. Please help me.