Can you, when mounted, swing your legs back and forth as far as you wish? Can you touch him there with a rope while mounted yourself, fiddle on his back with all your body parts, swing a whip, etc.? If not, it should all be done very, very slowly, as if with a green horse who has just been backed. It seems to me that he needs basic approach and retreat work by you at first, then by another horseperson with a good feel and timing to do it from the ground, while you're mounted.
When mounted no I can't swing my legs, I can move my left arm, lean forwards to pat him on the neck (either side) and I can feed him treats on his left hand side from the saddle (though this causes massive tension). Anything else will result in him panicing and bolting, when walking I am able to move my legs back, I can even give him a pony club kick but swinging legs will panic him.
I can't even carry a whip on him let alone swing it, picking up a lunge whip on the ground results in lots of tension (yes I've tried rubbing/scratching him with it and he will tolerate it but will NOT relax untill you put it on the floor).
Ropes are a big issue all on thier own that we have worked through on the ground but ropes whilst mounted is not something I would like to attempt (ropes on the ground resulted in him fracturing his skull and spliting his bottom lip in half, we can now long rein but it took 6 months to get him to the point where he didnt bolt blind as soon as the line went behind his bottom.)
I've done all the approach retreat stuff with him on the ground and he is unflappable on the ground you could quite litteraly do anything at all with him on the ground but put a rider on him and even with someone on the ground he will go into panic mode if touched behind my leg.
The major problem is that I do not want to provoke him into bolting as he does truely bolt blind, he will go into walls, through fences etc, he does not care about his own safety when he is panicing, he would litteraly gallop over the edge of a cliff if he is in that state of mind.
I've made major progress in that when he spooks under saddle he now will most of the time NOT bolt. I've taught him to stop dead instead and wait for reassurance, however spooking is not panicing and believe me his reaction to being touched behind the saddle is total and utter panic.
Will he do this if you have him on the lunge, saddle on, and then use desensitizing techniques, like with a flag on a stick, toward his flank and buttocks? No rider on at all. And have the stick /flag move from one side to the other so that it moves from one eye to the other.
You can do anything to him if you don't have a rider on him. Done the whole flag, plastic bag etc all over him, over his back etc both with and without saddle. He will not react to it if he does not have a rider on him.