You definitely need to find a way to separate them because otherwise, if you let her pregnancy continue and she lives, she will be pregnant again as soon as she kindles.
I would suggest that this is the breeders error and she should help you sort this out. She should be happy to help you splitting them, even if it means him going back to her temporarily until he is neutered, and also giving you some money towards the spay.
It might be worth also contacting your vets, explaining tthe situation and seeing if they will give you a payment plan.
It may well work out cheaper to find a way to spay now, than to need emegerncy vets, emergency surgery, the drugs, etc, if she does kindle and something goes wrong.
I believe a rescue on here had a rabbit who went into labour and had complications and it cost hundreds to try and help the rabbit (thinking £400 plus, but I do feel it was more, maybe in the region of £700-900). A spay will cost, hopefully less than £100.
If you make the choice that you're not going to spay then I'll do my best to offer all the support and information you need. The breeder, if she is responsible, should also be a good person to ask too.