Hello, welcome to the website. My name is Tony, I can assist you with this.
This does sounds like blackmail, yes. It is an offence you could report to the police.
You should make clear to him, at the same time, your basis for not paying the full amount.
So you're making it clear, all is on the record, why you refuse to pay him and that he is the one solely in the wrong here, and committing a criminal offence.
Well, the danger there, is that you put yourself in the crosshairs for blackmail too .... ideally, if you want to make a complaint, then you should just do that, otherwise, let it go. I understand why you want to do what you query, but I think you have to be very careful about this.
That depends on many things, but yes, it is. Have a look at the sentencing guidelines and various cases - they almost always result in imprisonment: http://www.cps.gov.uk/legal/s_to_u/sentencing_manual/blackmail_debt_enforcement/
Thank you. Hope you resolve this.
Is there anything else you would like me to answer for you?