I would get a lunge line and also bring in a lunge whip (or some long object with a string on the end) You don't have to use the lunge whip, but it's there if you need it. Also, never hit the horse with the whip, always do it right behind them.
My mare doesn't lunge so well at the walk. She makes more of an oval than a circle. I tell her "Out" and sometimes I'll push her with the lunge whip and other times I'll sort of walk towards her (it will create pressure without touching her) and she'll move out.
Sometimes though, I will have to walk sort of like I'm leading her, only she'll be 10ish feet away from me and I'll move in a small circle. That seems to help her too.
Don't make lunging about just making him race around you. Use it as a training session. Work on voice commands, upward and downward transitions, halting, and change of directions.
At first I would only lunge for 20 min. (10 min each way) and do it mostly at the walk and some trot work. Do that for about a 5-7 days and slowly ask him to trot longer, therefore increasing the time you're lunging him.
Depending on his fitness level and how well he does at lunging, you could start asking for the canter at about 2-3 weeks in. Make sure when you do start cantering him that the circle is big enough for him to canter.
I'm lunging 2 of my 3, and I'm starting out with some simple stuff and just getting Montana used to voice commands on the ground and some respect stuff too. I always praise both of them when they are doing something I like (Usually with just a "good boy" "good girl" or just a "good!"
You can also incorporate obstacles in your lunging (ground poles, tarps, small jumps, etc) that will all help them lose fat and start to build up muscle.