There are a lot of threads here on dealing with pushy horses. And Puck said it pretty simply. You have to set limits and be firm. In my opinion, like pulling off a bandaid, better to do it quick and clean. If you once had a clear relationship as herd leader with this horse, and it went soft due to not being there to enforce it, you just have to bite the bullet and enforce it. Once or twice very firmly is better than nagging. You might have to get big enough to jog his memory and get a clean change of heart in him. This is usually how horses do it. The dominant horse takes after the interloper good and hard, the other horse leaps in surprise and runs off. But he never makes that mistake again.
So, make an impression.
As for lunging, I look at lunging as something that is best learned from someone who reall knows how to do it. I mean anyone can make a horse go around them in a circle, but there can be a lot more to it. Is there anyone who might teach you? I paid a pro to give me two complete lessons , just on lunging. It was a real eye openner.
Hope it works for you.
Julie Goodnight is a great trainer and has a good website. check her out.