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DO NOT SAY ANYTHING! I guess you are quite young, right? You have to understand that everything you want to tell her will look like an excuse. Learn not to give a sh#t about what other people (especially girls) think/talk about you. This may take a while, but you have to learn it.
Girls in general are attracted to guys who do not worry about anything. What you are going to tell her sounds like you are so damn worried what people say and that someone found out the "truth" about you liking her.
Actions are the only way to "convince" her of anything, words won't do that. So if you want to do something, let her guess if what that girl told her is true: ignore her lightly and show everyone you're having a good time. Treat her as any other friend and pretend like nothing happened.
She will think stuff like "Is he ignoring me? Why is he ignoring me? But I thought... Wait, did he just look at me? Maybe not

"
ONLY if she asks you specifically about it, you can tell her that was just hugs with a friend and nothing more.
Read the stuff you were going to tell her again, but try to read it as if someone else would say it. Can you see how worried/creepy it sounds?