How about some group exercise activities. Like a walk after dinner, a bike ride, Wii fit. Do the other two boys get along with him ok, as they could all go out together (without the embarrassing parents). What about a sport, like rugby? (yes, I play rugby, so I am biased, but it does also cater for a lot of different shapes and sizes and doesn't involve having to wear swimming attire!). Sport also gives you targets to aim for. Weight should fall off boys of that age once they become active.
Could also make the meals on the whole more healthy, to try and ingrain in him that healthy food does not have to be horrible. Similarly, make sure fruit is used as a snack etc.
I think a gentle talk would also be good, as he is probably aware of his weight and would probably like a little assistance in shifting it. Getting rid of the excess weight now will be so much easier than when he is older.
It also sounds like he may be carrying all his weight round his middle. I am 5"3' (ish) and probably about half a stone lighter (and female), but I do not have that waist measurement. I admit I have always been active and do possess a lot of muscle, but it seems a bit strange to me. Weight around the middle is often used as an indicator for heart disease etc. so there are health concerns to worry about too.
I think the fact you're worried is a good sign. I think his Dad definitely needs to have a word with his Mum as she probably thinks she is spoiling him as she only sees him for the weekend. She may not realise the effect she is having on him...
I think as long as you put the emphasis on health and well being,not size and weight, everything will be fine.