This is definitely the cleanest way to handle the problem and it sounds like continuing through the spring might result in gigs that aren't enjoyable/uncomfortable vibes for possibly all 3 of you. I'm guessing this isn't what you're in it for.I think I'm going to propose we dissolve the band Saturday night, tell him we can't work with him anymore and that we're moving on without him. Straight up, no if ands or buts.
What say you?
If you explain to the bookers/owners why you had to cancel, and if you field a great band a few months down the road, it's unlikely that you won't be able to rebuild your gigging schedule. Good bands will work and as has been said, everyone will appreciate the fact that people associated with the band aren't hollering and throwing chairs.