It is really the girl's decision which one of you she wants to go out with, don't try to make that decision for her by backing down in favour of your friend.
Why not speak to your friend, tell him that you want to ask this girl out. Then ask the girl. Then if she chooses him and not you, you will have less reason to be bitter with your friend. Just be open and honest with everyone.
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Time is an illusion. Lunchtime doubly so.
Epona of The Laughing Hyenas
Proud winner of the 'Most Useless Post 250 Has Ever Seen' Award 2001. "I'd just like to thank my friends and family, without whom none of this would have been possible..."