That's how he gets to be a multi millionaire and you work for the Council. His noodles aren't boiling, he is just using the system against you and laughing all the way to the bank. You (the council) will win if it goes to court.
Any cash you force him into parting with will be written off against tax and he will be no worse off. His solicitors will pocket a fat fee as will yours and the tenant will still be no better off.
The difference is that he doesn't see this as personal whereas I suspect you do.