I am posting as a Guest not to Troll, but to ask the advice of friends who have been very helpful in the past here and to protect innocent parties that might be too easily identified if I use my real name.

I ask for guidance and help on 2 questions:
A
A "friend" X of many years (10+) has revealed to friend Y details of alleged conduct and has repeated speculation about my behaviour couched in terms to make Y mistrust me and doubt what I say, the length of my friendship with X added a lot of weight to the statements made. The sense of betrayal I feel is very real and very hurtful as is the real hurt and damage it has caused Y. I am at a loss to understand what possible motive X might have for doing this, any suggestions?
The questions I have are:
Do I
1. forgive X, in time, and try and preserve the friendship
2. "Ditch the Bitch"(as another friend put it) as not worth having as a friend and too dangerous to have close.
3. other suggestions please
B
I am in possession, (from the usual exchanges sub rosa between friends) of equally damaging "secrets" regarding X, some of a similar nature to those damaging me with Y. (X is hardly occupying the "moral high ground" in this.)
Should I :
1. reveal them to the interested parties, as X has done
2. say nothing, and thus be a better friend than X has proved to be
3. other suggestions please.