Not really his problem though is it? If a 'gentlemans' agreement was made to the effect described, then the guy should tear up the cheque as agreed.
If he has started work on something without the definite knowledge that it will all fit, or receiving a definite go ahead from his client, then that is his loss.
The deposit is pointless in this situation, but only because (presumably) the tradesman has asked for one but then also said he will tear it up if the thing does not fit etc etc. It is not the client at fault here to my mind.
I would cancel the Cheque ASAP and tell him to jog on. If he wants to play deposit games he needs to start putting it in writing and getting people to sign. At the end of the day, if you have no contract with him, or have signed no paperwork you are well within your right to cancel the Cheque. Did he even give you a receipt for it? Ask him if he declared it through his books
Cheers
Buff