HMmm ok how are you lunging him? Do you know how to lunge properly and have you lunged difficult horses before?
Make absolutely certain he has no soreness anywhere and make sure his saddle and bridle are a perfect fit. You can often exclude problems with tack by lunging first only in a halter and seeing if he behaves, then in a bridle, then a saddle and so on. You can pick what he's having issues with.
I'd go back to the very beginning with him. When I get horses ott I basically re-break them. I would probably put him in a rope halter, then go through baby steps. Make him walk immediately from a slight tug on the halter, and back up from a pressure on his halter. Yield his shoulders and hindquarters both ways, then ask him to move his jaw away, his neck etc. Every part of him should yield to your touch if you demand it.
Make sure he will lead at your side, not lagging behind and not towing you along. Make him stop when you want to stop, go when you want to go. If he enters your space, give him a hard time about it. Shake the lead, wave an arm, move aggressively towards him until he steps away from you.
Once he's learnt how to behave on the ground, you can pick back up with the lunging. Put him on the lunge in a bridle and roller. Run your lunge rein through the bit and clip it to one of the lower D rings on the roller. Ask him to move away from you by walking towards his shoulder and flicking the whip if need be. Get him walking out on a nice big 20m circle. Once he's walked the circle without coming in or facing up to you, ask him to trot on.
if he faces up to you, get behind him and flick the whip towards him. Some horses are stubborn ******s and you may need to run up and wave at him to really get your point across. If he takes off, no worries just drive him more for a couple of circles so he begins to think they you are actually asking him to run. Offer him the opportunity to slow up, and if he doesn't, drive him again. He'll come to the conclusion that slowing up is far easier than running flat out on a small circle.
Ensure that you are always positioned slightly more towards his hip than his shoulder so that you are in more of a convenient position to drive him should he try to stop and face you.
if you get in his face when he rears and backs up, he has no other choice than to rear and back up so it is vitally important that you get behind him and make him go forward.
Rearing stems from 1 of 2 things.
1. An evasion of the forward aids - a lazy horse may very well rear to avoid going forward, this is a dangerous habit and needs to be nipped in the bud asap.
2. The rider is giving the horse conflicting aids - i.e. asking the horse to go forward, but the giving it no option to go forwards by restricting the forward motion via hanging off the reins, or standing too far in front of the shoulder when lunging. This leaves the horse feeling trapped. He cannot go backwards, he cannot go forwards so he must go up as an escape.
In both instances, forward is the key. It sounds like your boy is rearing for the 1st reason, and I would really get up him and establish that flight rather than fight button. Make him aware of the forward aids, make him aware that if he doesn't react to an initial forward aid by moving forwards immediately, what will follow is not nice, a sharp flick of the whip. A horse cannot rear while going forward, it is physically impossible so keep him moving. As i said when describing lunging, get behind him and DRIVE, keep him even a little more forward than what you would lunge a horse normally, forward is the key.
Don't get on him until he is perfect on the ground and is lunging calmly with no hint of wanting to go up or backwards.
When it is time to get on, drop your reins. Let him have his head and neck so he feels no restriction in the beginning. Put your leg on and if he doesn't go, hit him. Sit back, maybe grab a chunk of rein or a make yourself an 'oh ****' strap out of an old stirrup leather around his neck so you can keep balanced if he bucks to the whip. If he does buck, whack him again, do not give up whacking him until he has giving up bucking and gone forward, otherwise you will have taught him to buck to the whip and you'll be in even more trouble!
He absolutely MUST go forward. Walk trot and canter must all be 'pony club' style. Long reins out to the buckle, reins in one hand, whip in the other if you really need to get extreme. Every time he goes to slow or baulk, put your leg on or tap him and keep him moving until You ask him to slow.