You and mr.Y forms majority in current company. I think if the regulations permit in UK, dilute Mr.X's share down to whatever percentage you think is appropriat

You and mr.Y forms majority in current company. I think if the regulations permit in UK, dilute Mr.X's share down to whatever percentage you think is appropriate or incorporate new company if nothing works. This above thing works unless Mr. X has lot of leverage in other aspects like domain knowledge or clients. If you are invested in the idea, I suggest you work on gaining the leverage before attempting anything.