Someone is spreading rumours about me and bullying me

Ok so basically I had a friend let's call him Jim. So last year Jim began criticising everyone whenever they did something wrong including me. One day he was talking to me and a couple of my other friends and brung up my dad. He started telling my friends my dad is an idiot because Jim always sees him at the place of worship (I'd prefer not to state my religion) praying all the time and practicing the religion properly. So I just stood by and said "that's your opinion". As it was on a Friday the next time I saw him was on Monday and I told him that I'm no longer his friend and that was that. So then he began to realise that people are starting to not like him so he stopped criticising people. A few months later he started making up stories (I have no idea why) that I was saying things about him behind his back and several times since then he has confonted me and said with a smile "what's this you've been saying about me behind my back?" and usually say "nothing" and he he says "yes you have. Don't lie to me!" and I say "you believe what you want to believe I don't care" and he says " I will believe what I want to believe. Next time you have something to say say it to my face!" And I say "No, because I have nothing to say" and then he begins walking away while saying the word "cunt" Ok so there's my story and I really need help on how to deal with this guy I just can't stand this anymore

cold war between you and him already begun. You may ask your Dad how to deal with this this guy and I'm sure he knows the best solution better than any one else here in website. Just allow your Dad to help and protect you because I feel that your Dad is your best teacher for this kind of situation.....Hope this help.

Thank you PROBLEMTOLERANCE and SUSIEDQQ. The day it happened I told both of my parents and they both told me never to go near anyone that much of a low life and to disassociate myself from him completely. When he began picking on me a few months later I kept it to myself but recently my mum realised there was something wrong so I spilled the beans to her and she said that if he ever says anything to me from now I have to tell her and she will go into school and talk to someone about him and she also said that she isn't scared of his family and she WILL tell somebody if it happens again. So then I told my mum that I reckon I could beat him in a fight even though he's taller and has less body fat than me because he may have less body fat than me but I have more muscle than him and I may have slow reactions but I have been training myself and now I can pack a sincerely hard and fast punch. Also the fact that I went to martial arts for two years and I currently go to the gym twice a week gives me more advantages. My mum then told me to never fight someone like that because his parents are lowlifes and if I do hurt him his parents will come knocking on our door and will start shouting and swearing at us she also said that every time she walks past them they will swear at her so I have to never fight him. I then told my mum I've been having frequent dreams about beating him up and my mum said completely ignore these dreams and don't do anything of the sort. SUSIEDQQ I understand your response but from what I told you earlier may I just ask what makes him sound extremely dangerous. PROBLEMTOLERANCE thank you for the advice.