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I think your neighbour is just trying to scare you into agreeing to release your right of way (ROW).
Even though you have not used the ROW for 20 years does not mean it is not legally in force. In deed, it is virtually impossible for a ROW to cease to have any effect, unless th eparty who has the benefit of it, agrees to release their right over it. There was a case whereby a ROW had not been used for 50 years, and the COurt still determined that the ROW remained in force/valid.
I would therefore suggest that you inform your neighbour that you won't be agreeing to any of their demands!
I hope this assists and sets out the legal position.