Did the bank take the fake money from him? As far as I know, if anyone tries to deposit fake notes, the bank has by law to take them from the person to prevent them being circulated further.
It may be a scam I don't know, but if it was me in your shoes especially faced with these threats I'd be tempted to say give me back the money (minus the £60 fake which likely he doesn't have now) and give him back the phone. I'd be very pissed off about the whole thing and being down £60, but I'd rather get this person off my back and sleep soundly.
Also, you say it was paid for with money from your wages, so I'm assuming you get paid in cash ? You could ask whoever pays you where the money was from, although you still probably won't get any satisfaction. Unfortunately with fake notes, someone is always going to be a loser