What to do when a referee wants to criticize someone else through me A couple of months ago I submitted a paper for which a referee review came back recently, recommending minor corrections. There are two methods to calculate some quantities in the literature which do not agree between each other. My paper agrees with one of them and not with the other, which I know is incorrect. However, in my paper I did not point this out (that it is incorrect, I do mention the other method), but simply focused instead on the method I use.

Now, the referee seems to be eager for me to profusely comment on the incorrect method and specifically refer to several papers written by people from the same group using this particular method. I get the impression that this referee is trying to use me to criticize them. I would prefer to be as diplomatic as possible, and remain in good terms with the others who use the incorrect method, who I have met in person several times. However, openly stating their method to be wrong, even if choosing the wording to be as nice as possible, would make that difficult.

What should I do in this case?
In my opinion, having a proof that a method is incorrect and keeping it to yourself due to diplomatic/social concerns is neither the scientific nor the friendly thing to do. 

If I was working in a group which uses a method frequently I'd expect a friend knowing that it was flawed to share his/her concerns with me in a constructive and friendly manner, knowing that the next researcher who discovers such flaws might not be friendly about it. I'd also hate to be putting time and effort based on something flawed.

Once that was done by that friend, we could find out between us whether the method is really flawed. If it is, I won't be offended if it's published in a paper he wrote.