Open Question: Should i just pack my things and move out? Landlord being dodgy,demanding extra £?

It's a very long story. Basically i had a contract with my landlord but it was only for first 3 months and then we never renewed it, she was a friend of a friend, i know i should have been more careful but here is the thing. She wanst to refurbish the house now so i have to move out end of month.my flatmate has paid her deposit, i didn't when i moved in.She all of a sudden came up with water bill after 2 years of me living in there and apart from gas/electricity never paid for water or council tax. she was treatening me not to give my flatmate his deposit unless i pay her at least 150quid for water.she told him to pay 40 and him and me had enough of this so said OK. she made me sign some hand written piece of paper that on 25th i will pay her 150.00 he is leaving today and will get his money so i wanna ask if i leave without paying her that 150 as i think there is something dodggy going on, can she use this scrap of paper hand written about me paying her 150 against me???? I have never done this before but don't tell me she didn't know about water bill for 2years and that they were NO LETTERS! i ASKED HE ABOUT THIS AND SHE SAID : I DO NOT WISH TO DISCUSS THIS! so i know something is up but i just can't prove it.