Little bugger, exactly what Mercedes said.
Without forward, you have nothing. Don't even bother thinking about circles if you can't get forward, you will NEVER get a perfectly straight circle if your horse is not in front of the leg.
Once you have forward, I will put money on it that the circle shape will come easily ;) A horse in front of the leg is 100x easier to steer than one behind the leg.
To get the forward, again as mercedes said, lots of transitions in trot and between walk and trot, then start asking for canter. Get into a big open area, or just ride wide in the arena, and ride him in a forward seat ask really rev him up. Just hoon him around the arena, have some fun, think of galloping. Then come back to trot for a little while, pop him back up to canter and 9/10 horses will be far more responsive to the leg after you've really got up them and made them hoon.
Do the opposite of what the horse wants ;) If he wants to take of and be stupid, stop him. If he wants to stop, make him go.
Also, you say he has been out of work for some time. Put him on the lunge and canter him out on a big circle. If he doesn't go forward, crack the lunge whip behind him and chase him out. Trust me, he'll go forward after a couple of go's. Once he's got forward down pat on the lunge, hop back on him and get a friend to stand in the middle with a lunge whip, ask for canter, and if he doesn't go, have your friend flick the whip at him (hold onto the saddle pad if you are the sort of rider that will gob him in the mouth when he takes a leap forward, you definitely don't want to hit him in the mouth for this reaction)