Hi Anastasia,
Just thought I'd lend some support, as I'm also in the process of extricating myself from a friendship of 25 years.
I'm for Elsabelle's approach - be busy and unavailable and if she doesn't take the hint, be honest with her, because at least then you have tried to let her down gently.
I had allowed myself for years to be bullied and dictated to by my friend. I struggle with self-esteem and didn't question her friendship, even though as the years went by, mutual friends all fell out with her.
I felt very panicked at the beginning when I contemplated cutting her off. First, because I dreaded the thought of confronting her and, second, because I felt guilty, as she had helped me in concrete ways just before I cut contact with her. Help which, however, did not make up for years of bad behaviour and which I had not asked for.
What I've learnt in these situations is that the fear is worse than the reality. I, too, was convinced she would not take the hint - as she is so determined and forceful - but I think she has.
I thought long and hard about how to end our association, but knew that telling her outright would lead to an argument and I would end up being the wrong one. I didn't want to hurt her feelings, despite everything.
I was simply "busy" every time she texted. When she called I didn't pick up but would text her a couple of days later saying I was busy. The only excuse I've ever given her is that I'm "busy". I've had to do this over and over again, like a broken record, but finally the calls and texts have stopped.
She hasn't asked me why, but if she does, I will be honest with her.
If you are busy and unavailable, there is nothing your friend can do about it. Likewise, the next time she asks to borrow money, just say, "Sorry but I can't, I can't afford it" (because you can't - you have your own family to think of).
Good luck and try not to worry about this too much because it may not turn out as badly as you fear.