HELP! Is this guy being inappropriate?

Right story time... grab snack lads, you're in for a bumpy ride. So there's this guy. There always is. He has a girlfriend (who is a messed up story for another time). Myself and this guy have been friends for two years. I fancied him, we flirted, I made the first move and got rejected. Hey ho, life goes on. Moving on with my life as one does. Then recently we have been messaging ya know as one does with their friends. And then it got flirty. He asks me why I don't take my PJs off and that I should sleep naked. He said that he wants to sleep in my bed and hug me all night. He said that the best feeling in the world is hugging me. He said that I am beautiful. He has tried on multiple occasions to organise times where we would meet up and it just be us. I always reply politely, and trying to keep things at bay. THE DUDE HAS A GIRLFRIEND. I think he is turning to me for some light hearted flirting cos his girl friend is a bit of a nutter, and by 'bit of' I mean full on crazy and he finds it really hard to deal with her. So, TSR, I pose to you the question... what do I do? I don't fancy him, I don't want to make things even worse between him and his psycho girlfriend (who if she knew this was happening would go nuts). Here endeth my query X