As it works here in the US, you can take anything you've personally wrote and go your own way with it unless the following exists... You've signed or >>cleary<< declared that you are relinquishing ownership of it to them, they own a patent to the work you're doing for them and thus they have priority over it, or you've been paid and on the terms of payment was that you were providing them with code. The last one about being paid is still arguable but worth noting as you can argue that they were paying you for a license to the code you were writing and you just happen to be more open to share information and listen to their opinion on the matter.

In a situation like this, if the idea is stellar enough (and you understand it enough) that you could do the idea without them and it would likely be successful, I would take it and form your own company, potentially file for patents on anything new, and look immediately for investors.

In the world of business there are two key things which separate one from another, and both must be present. The first is material, code, visual/displayable proof of concept, prototype, or product. The second is money to execute and grow the material and code. With those two things, you'll have the upper hand against them at any time. Some will argue in the long run, if they manage to survive being beaten out in the beginning by product and money, that they may have a greater vision or business sense to execute it more efficiently, but the success would be unlikely. From your description of them I would think they would quickly crumble under the matter and the fact that you did what he's so scared of and he drove you to do would render him utterly useless/dysfunctional.

THAT IS JUST MY POSITION AND TAKE ON IT. I AM NOT A LAWYER AND DO NOT CLAIM TO BE CURRENT OR ABSOLUTE IN MY LAW KNOWLEDGE. THE ABOVE IS JUST MY OPINION AND VIEWPOINT ON THE TOPIC IN QUESTION.