plagiarism?!

I don't know if I've told that I'm posting my story online. Anyways,my work was plagiarized. I didn't comment on her work for days and actually waited for other readers to notice it. yesterday,someone actually noticed it and that was then she admits that her story was based on mine. she said that she asks for my permission but the problem is i didn't gave it to her. maybe,it was also my fault for not rejecting her frankly. now, i am having qualms to post the next chapter because she obviously writes better. i am really confused as to what to do. i really dont want to disappoint my readers for not finishing it but then i felt insecure. ugh, i am really frustrated and angry.
oh yeah, i messaged her and told her that i was greatly offended.
please help! what should i do?