One of my very good friend is misunderstanding my friendship to be love. How do I convey what is true, so that I don't hurt him and don't lose out on our friendship either?

Stress as much as possible what a good friend they are and always will be.

Well having just found out the friend I like has a girlfriend, my advice would be what he did for me: stressed that he would always been there when I needed him and that we were still friends. It hurt, and I'm still hurting, but he handled it gracefully and compassionately. I don't know when or how I will see him again, but I'm glad to know he's still there for me. Hope this helps.