So, let me get this straight.
Your son is 16, your husband has been in your son's life since your son was 8.
Your son's biological father is still on the scene, but doesn't seem to be involved in your current dillema.
Your Mother has chosen to take your son's side and so made the situation worse for your.
For what it's worth, here's my 2 cents worth.
Your son is playing you and your husband off against one another and winning. He wants to do what he wants, when he wants, with no responsibility. Your Mother is letting him.
Your husband wants him to pull his head in and live in the real world.
You are torn because you love your son and are worried about loosing him.
You won't loose your son over this, but you may loose your husband.
Your husband is right, and you need to project a united front, no matter how torn you feel. If you pander to your son not only will he walk all over you, it could ruin your marriage, and it WILL set your son up to fail when he eventually has to stop being a stroppy teenager and become a man.
Your job as a parent is to help him become a man. You can't do that if you cave in every time he has a tantrum (and that's what this is). As hard as it is (and I know how hard it can be because my son is 22) you have to take a step back and let him go. Let him make his own mistakes and learn the consequences of his actions.
He has chosen to go and live with his Nan. Fine. Let him.
Your Mother has chosen to run after him and indulge him. Let her.
Your Husband has chosen to make a stand, to try and teach your son what happens in the real world. You need to support him.
You also need to tell your son that you don't agree with his decision, but it's his to make. You also need to tell him that you love him and that the door will always be open for him to come home. Tell him that if he chooses to come home, he does so on the understanding that if he does so, he has to start pulling his weight, focus on his future and DO something. If he wants to sit around and watch TV all day he can, but he won't be doing it at your place.
Just so you know, we went through something similar with my Husband's eldest girl. She dropped out of school, sat in her room all day playing computer games. We let it slide for a while and then said enough was enough, she was old enough to get a job and contribute to the family/focus on her future/decide what she wanted to do. She refused. Her Dad lined up 3 job interviews for her. She refused to attend. Sometimes she would put a load of washing on/do the dishes, mostly she wouldn't. She said she was an adult now and could do what she liked. In the end we gave her a choice. Live with us, be an adult and get a job or do volunteer work. Contribute in some way. If she didn't want to do that, she wanted to sit in her room all day, go and live with her Mother. She chose to live with her Mother. It caused all sorts of ruptions and a world of hurt at the time, and 3 years on she's still living with her Mother BUT she's now doing volunteer work and is doing some night classes. She is slowly coming to realise that sitting in her room is no way to build a future and whilst we will help her, she has to help herself too... oh and she still has a good relationship with her Dad.