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Co-worker makes up story about sexing me at work

I’m mainly posting this for the entertainment value, but if anyone is strongly opinionated about something they think I should do, feel free to chime in.

I’m an American on a 3-4 month short term assignment for my company in Sao Paulo, Brazil. I got drunk with the girl in question the first weekend that I was here, and kissed her at about 4am in a club. I was not interested in taking it any further, so nothing else happened.

Skip forward a month and we’re still hanging out and things seem fine. Out of the blue another girl in the office with whom I’ve become pretty close asked me if I slept with Girl A in a conference room at work? I was disappointed to hear this rumor, but our department is about 20 people, 15 of which are girls who mostly love to gossip, so I guess it was not so surprising. Girl B later told me that Girl A had actually started the rumor herself, but only told one person and she didn’t think it had gone very far. I got pissed.

A couple days later I found out that she had also told the story to a different person, and this time was crying while telling it. Apparently she also claims that she was in my hotel room one morning when someone from the office called me to set up a taxi ride and heard a female voice (it was the maid).

So this girl is clearly Fed up, and I guess by rejecting her I sent her over the edge. These “admissions” have only come about now that she’s found out I’ve been messing around with other girls. One of my friends thinks I should tell a senior manager in the office, since everyone will surely have heard it pretty soon, and I could set the record straight with those in charge. Someone else thinks I should confront her, but she’s unstable, and I can’t handle a nervous breakdown. I'm also not supposed to have heard this. Next time I am alone with her I’m probably going to innocently ask her if she has heard the rumor, to see what she says. Either way it should be fun.

If someone is offering advice and thinks it will make a difference, I have already told the company that I am quitting when I return to the US in a couple of months.

She’s not attractive, and I will not be supplying pictures.

CLIFF NOTES: I’m on a short term assignment in Brazil and a co-worker is telling other co-workers that we had sex in a conference room; once crying while recounting the story. It is not true.