Dog is always muzzled, on lead, walked at quiet times, never around visitors or strangers. He is well managed and has never bitten anyone. He plays with other dogs and socialises with people he knows. He will allow other people to touch him if he knows I am there and it's okay.
Today an accident happened, the lead wasn't on properly, I don't know how. I normally have it attached in two points but didn't out of laziness. I'm an idiot. He saw someone in the distance that I didn't and ran up to him barking and circling him. Normally he is on lead and so this couldn't happen but not this time. No damage thankfully, just one understandably very angry person who was barked at aggressively and proberbly was terrified but I am having panic attacks about it, replaying it over and over.
I'm embarrassed to leave the house and have anxiety about seeing the person again, or about what people may say or think about me.
I didn't think it would be so hard. Dog has never shown aggression to me or family, raises orphaned kittens, plays with other dogs, loves cuddles and kisses and has been raised by me from a tiny baby. He is currently fast asleep on my feet like he always has done. Dog has never bitten anyone but I don't trust him. He has attended training classes and socialisation sessions since 8 weeks old. He isn't likely to attack someone, and even if he did it would be pretty difficult as he is muzzled, but it's soul destroying to live with a dog who can't be trusted outside of the house.
He couldn't be rehomed. He is devoted to our family, he can't be separated from us for a moment. He is aggressive in a kennel and nobody would get near him. On top of this he has a serious and very expensive medical problem (not related to his aggression issue-we've checked!) which means he is very unlikely to be rehomed. If I can't cope, I would rather he was PTS in my arms where he feels safe and loved 
I feel so guilty, this is the worst decision I've ever considered in my life.