RED RED STOP!!!!!!!! Your best bet may be to say, and mean it, that you realize you got involved with him during a time that you need to be on your own, as you have things to do and sort out that require being out of a relationship.
You could be honest, not mention your friend, and just say you realize that it is too much for you, and not what you want or need, that you can still be casually friendly "hello" at the dojo etc., but that you cannot be intimate with him.