I agree. Keep the money and pay someone else, but drop him a letter to confirm - nothing wordy just a few lines "confirming" your conversation
Fair dues to him for coming out with that, so you know where you stand. You've had a bad experience, so move on - its probably not worth the trouble and stress dealing with the builder any further
Don't worry. Matt Albright and his Portuguese sidekick will soon be on the case. Popping out of wardrobes on the next job your builders on. Melinda and Dom will be on yer builders case soon. Dom will be chasing him down the street , whilst Melinda's down the shops blagging you a brand new kitchen /bedroom hot tub / caravan / etc, etc for free.
Happy Days.
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