This is something that needs to be done face to face. She will have more respect then if you do it the cowards way. Keep it simple by stating something about how you really feel and that you do not want to continue to mislead her but want to be friends. Pick a place that is not too public to tell her. She may start to cry but assure her of the friendship you want. Good luck.
You can tell if a girl wants to be friend if she is interested in other boys and if the relationship does not seem to head anywhere. The sure way to know is by asking her about the course of the relationship.
Do not tell her on Facebook like SV123 suggests, that's just rude. Talk with her in person and just let her down nicely. Let her know you don't have any stronger feelings for her other than friendship.