I'm (really am) sorry if this sounds harsh, but I think you are equally to blame as your DS is ... probably more so.
Your son's life is spiralling into serious debt and, I think, that you are enabling a lot of that spiral. Yet, despite the things that you acknowledge in your posts, what I am mostly hearing is 'oh woe is me, poor working mum whose generosity is being abused'.
"He signed for the house with no prospect of work in his uni town because he wanted to stay there with friends"
No he didn't. You did. You told us that you signed as guarantor for the house, and we know from your posts that you did so knowing that your son is already in debt and has (as things stand) shown no prospects of being able to pay the rent. You have enabled further spiral into debt.
He has clearly shown that he is anxious about this, is uncomfortable talking about it, is preserving an illusion that that things are okay and that there is (currently) hope of financial stability ... you are enabling this. Holidays, gym memberships, flats, trips to see his girlfriend, is all fodder for his illusion and you are the one who is doing that.
I think you should start taking this all a bit more seriously. I think you should start taking his anxiety a bit more seriously.
I am not in any way suggesting that you should 'cut him loose' financially as clearly (for whatever reason) he is not currently in a state of mind to deal with that ... but I do think you should cut out the crap.
By all means, keep his head above water (in terms of the things that he needs to actually live, like food, but not things like gym memberships, trips, clothes). Help him to live within the boudaries his financial circumstances create, whatever they may be.
Especially, I think you and your husband should start to consider whether this is simply down to laziness, irresponsibility, and lack of parental financial boundaries ... or whether there is something deeper going on.
"though he was anxious during his course but this, now, can't be enough to hold him back, especially as I'm telling him, truthfully, that we can't afford to go on funding every aspect of his life, including his rent, clothes, gym, weekends away"
Yes it could. Anxiety could be enough to hold him back and what you're telling him could simply be enough to make his anxiety worse! Especially when your actions in funding things (that no one can afford) not only give an opposing message to what your saying, but also are making the (financial) problem so very much worse.
As I said at the beginning, I'm sorry, this is harsh I know ... but I think there is a bigger picture here, and that you should consider whether that is the case.