It all kicked off last night when Chloe Lewis revealed a rumour is sweeping Essex that Megan slept with her boyfriend Jake Hall.
Megan - who is dating Pete Wicks - vehemently denied that.
But speaking to Chloe the next morning, Lydia – who missed the showdown as she was ill – said: "If she's defensive and aggressive in her tone, to me, that always screams guilty. I didn't trust her from the get-go."
As you'd expect, Chloe's friends were on her side, with Georgia Kousoulou, Danielle Armstrong and Kate Wright all offering their support.
The trio all revealed they'd heard from Megan's best friend Chloe Meadows that the rumour was true, although Chloe M denied saying anything.
Chloe M said: "I think people misconstrued what I was saying. I certainly didn't confirm anything. I was being so careful what I said as I didn't want to get involved."
Danielle, however, insisted she had: "I get you're in a sh*tty position as last night we did have a lot to drink. You might not have intended to do it, you might not have meant to, but it did happen as the three of us were sitting there."
Meanwhile, Kate revealed "I just said to Chloe Meadows, why did you deny knowing Dan in Gran Canaria? She said she got a phone call from Jake saying, don't say anything about Megan, so she was too scared to admit she knew any of the boys."
Georgia added: "Chloe actually said, her words were, 'I want Chloe to know because Jake is an asshole and she needs to be able to move on.'"
TOWIE continues Sunday at 10pm on ITVBe
10 reasons why we want to be in TOWIE: