Hi Haysi,
I've been accused of a few things in the past and there's nothing like taking the bull by the horns and confronting the person who made the accusation.
I guess once you've said your bit, there's not much else you can do - especially when it's someone who enjoys watching the mess they've created by making false accusations.
It's much easier to be the bigger man (for want of a more appropriate expression) and to walk away knowing that you haven't lowered yourself to their level.