you're not obliged to give a reference, and you're quite right to stay away from the potential problems you'll encounter if you give a bad reference.
It might be an idea, if you feel it appropriate, to respond with a reference which is honest in terms of those qualities which your ex employee had.
Was she a good timekeeper? reliable? popular with other members of the team? able to respond to instructions from management?. If the answer to none of these is yes, then that invites the question as to why she worked for you at all. If you can find something positive to say, then, at the very least, it prevents her calling you to ask why she has been unable to get a reference...