A friend has asked me out... how do I say no?

Either don't reply, lie and say you're busy, or maybe say something like "Hey yeah I wouldn't mind doing something. Let's ask (insert names of your other friends in your group) along." Make the point clear that if you two are going out, it will NOT be just the two of you. He should get the message. And don't flirt with him (but be polite) or start convos with him (but reply when he talks). Let him know you aren't interested. Good luck.