Lyric discussion by ~Lexi~ 

Cover art for Caroline lyrics by Kirsty MacColl

Again, the meaning of this song is pretty straightforward. It's a literal description of a situation where Caroline's boyfriend (or husband) finishes with her and goes off to start a (sexual) relationship with Caroline's best friend (the singer of the song).

The singer plainly feels guilty and somewhat disgusted with herself ("I'm so ashamed of myself..."), and also angry with the man in question ("How could you walk out on her and turn to her best friend?"), but she can't bring herself to end the relationship ("...but I still want you") and obviously has no intention of doing so ("...when she finds out you're mine").

It's her answer to "Jolene".