Youngest in class

I am having a difficult time with my 7-year old.  He is in 2nd grade and has been in 2 different schools.  The one that he attended as a kindergartner closed at the end of that year.  We chose to go to another small school similar to what he was used to.  We fought every morning for him to go into the school.  I would have to drag him kicking and crying into the school to his classroom and if I didn't sit with him for a little while, he would get extremely upset.  The teacher would literally have to pull him off of me so that I could leave.  As soon as I was gone, he was fine.  We dealt with all of that to come to a student/teacher conflict.  Being in a new school system, we weren't aware of all the "little things" that make school life work.  This teacher, as we found out, wasn't the best at making life in the classroom easy.  ANYWAY...2nd grade started out great and he doesn't have a problem after the first day when the teacher politely informed him that it was his job to get out of the car and come into class without his mom and that I shouldn't have to walk him in.  He would be just fine and has been.  She is a fantastic teacher.  

ok with all of that...here is the problem.
He struggled a lot with doing homework and reading last year.  To the tune of being about 3 months behind in his reading series.  This year he has a terrible time concentrating on his work and it is still very hard to make him do his homework at night.  He is so stubborn that it is like talking to a wall.  It doesn't work to yell at him as he just shuts down when that happens.  I sit with him every night and what should only take him 15 minutes to do usually takes 30.  The teacher has talked to me about holding him back as he is the youngest in his class and at least one of the students (there are only 14 in the class) is about 15 months older than he is.  He has a horrible time staying focused.  He knows how to do the work and when he is worked with one on one...he can read to the specs of an accelerated reader.  He can do his other work when he decides that he wants to do it.  He has been tested for special education and actually did some of the tests in half the time alloted.  His results soared.  
The teacher has discussed her thoughts on this and when I express my concern for holding him back she says that he has the potential to be a leader and knows the stuff.  He just doesn't understand how to process all of that information in his head all the time.  She has worked many years with the 3rd grade teacher and neither of these teacher feel that he is ready to go into the 3rd grade.  The 3rd grade and the 5th grade are both the hardest grades.  Just so much transition.  He uses big words and uses them correctly.  He has great problem-solving skills.  Most of the time I figure it is stubbornness that is causing this problem, but I can't use that as an excuse for when he doesn't do his homework.  
I know that I am the parent and that he should be doing what I say, but when it is a daily argument to do homework, you can only fight for so long before you are ready to give up yourself.  
I have until the end of March to decide what I want to do.  His father won't even discuss the needs of our son.  
I honestly don't know what to do.  If we hold him back then we take a chance on breaking down his self-esteem and causing confidence problems.  If we don't hold him back then we are going to have study problems forever.  There are many times when I can't sit down with him at night, if I don't do it, he doesn't get it done.  Just doesn't seem to be a priority for his dad.  They don't want to fight with him as he just shuts down.
I am looking for suggestions and thoughts...just need to make as accurate a decision as possible.
Thanks,

[babyboys02]

Hi Zurch

I ran into your post,while browsing. I have a son that is 7 and is in the 2nd grade and I had trouble getting him to go to school also, he would tell me his belly hurt. Well come to find out my son was getting bullied at school, it's sad to see them not want to go to school cause these other kids have no respect.I just thought maybe your son was getting picked on like my son.This may not be the case for your son,but I sat down with him one night and asked what was bothering him,how school was going and he finally came out and told me about the kid's picking on him.I had a long talk with the Principal and the Teacher, things are getting better, I was even considering homeschooling. I hope the best for you and your son.