Yes, it is wrong to lead someone on if you don't care much to be around them. Far better to cause hurt feelings but free the person and allow them to move on to a someone compatible. And, there is no such thing as "being friends" if you have no attraction to the person who is of a sexual orientation that is desirable yet the individual is not. It is a waste of time for both of you. Hetero guys can be friends with one another or hetero girls can be friends with one another. "Just being friends" when not attracted, is a big lie, way of avoiding the truth, avoiding reality.
get rid of the poor fucker, just make sure he isnt the type that will start stalking you first, if he does pay someone to thrash him into the dirt, or just get your father/brother to do it P.S. dont let the cops catch you, even though they won't do shit to protect you from this type of person, not in U.S anyways
Tell him how you feel. Give him the chance to change your mind, and if he isn't able to, then you have to break up.
It really is that simple. The hard part is actually doing it.