He sounds unconfident in his own instincts and judgement, and she I would say 99.9% is threatened by how much he clearly does like you and how much you are right for him.
He's been hurt before. He's know this friend a long time and by the sounds of things, they have a friendship where she tells him what to think and do, because probably although they haven't had a relationship because he doesn't fancy her, she kind of fancies him, and feels like she is his closest woman, albeit not lover.
There are women who are like this, and are horribly proprietorial over their imaginary husbands ...
It shows his insecurity, but I think it very much shows also his reliance on her. This, remember, is something that has come about as a result of his 'failure' to be in a happy long term relationship. She has been a bit of a substitute - a surrogate non-wife. That doesn't mean to say it can't all change now. But she knows that if you become his closest counsel, then she will be out the door - and she probably doesn't like that thought. She would then just become the friend she should be, and you would be his number one.
So I think it's as much her as him, and tbh he will only have the chance of falling in love and being with someone properly (e.g., you), if he manages to ignore her.
You have to win his confidence, and although others here will say he isn't worth it if he's so flaky that he just lets her dent his confidence in your mutual attraction, I think it sounds like there is genuine chemistry and compatibility between you too, so it's worth giving him a bit of a chance.
You have to address this with him. Ask him what the hell she knows about you and him - nothing. Only you two really know how you feel. Ask him how long when he first met you before he realised he wanted you. If you're properly in sync then probably less than 13 seconds, if he's honest. Share how you felt about him.
Anyone wanting to be with this guy will have to first wrest him out of his dependance on this female friend. I think it's worth being kind to him and giving him the chance, because she's been someone he's relied on for years. It's not easy to change that overnight.
However, he might not be able to step up. In which case, you'll have to sadly let him go. I'd give him a chance first, though.