This is an interesting question to me as I can easily see myself in the same situation in the future, in case I actually stay in the academia. Currently I am a postdoc, considering using my skills in a different way. I grew tired of the feudal organisation pertaining modern academia.
I belong in a completely different realm (biology) but essentially I see the core issues in my sphere. I believe this is a growing widespread problem, and that significant conflicts will be inevitable to anyone seeking a truly scientific (=unbiased and independent) career. I elaborate below with my proposed line of action.
There has been a steep increase in the number of academics. That meant comparatively few established professors had to advise numerous younger academics. In many institutions most of the oldest professors had a straightforward entry to their departments, and became local political figures. For numerous reasons, funding and career pressure has shifted to productivity scores, thus in order to stay at the top most established professors had devised strategies keep up with the ever-growing number demands. They use their influence to attract (artificial) productivity numbers which further increases their influence. This generated a feudal system where so numerous are the vassals paying toll to 'lablords' in order to have a place to work.
Finally, anyone willing to become a 'lablord' needs to be nominated or somehow shoulder his way into this aristocracy. Most of the academic vassals are trying to buy their way into aristocracy over extended years of subservience. The main problems are (i) not all aristocrat professors can or will nominate one of their 'loyal vassals'; (ii) because of the channelling productivity goals are ever-increasing far beyond the reach of many of the most invested young academics; (iii) most a true scientist cannot remain loyal to biased practice, e.g. stick to some clan doctrine or etiquette. The result of such feudal system is a bubble, which is bound to lead to a general revolt (a PhD cannot be unmade).
Now I believe you find yourself in this uncomfortable moment where you've been paying loyalty for so many years, feeding the very influence sphere which you did not foresee as your future enemy. Because if you wish to grow as a scientist, you must free yourself. Unfortunately there are currently too few young academics at war against the established aristocracy, so it'll be hard to obtain allies. My advice to you is that you make a fundamental career choice:
(a) You remain loyal and lower scientific & moral standards to enjoy some academic peace for longer. In such case you must see what to openly sacrifice to hopefully please your 'lord' while offering something else to reestablish the political support. You must know this person well enough and would know where to press. Mind you that it might be just too late, and there is no true obligation of the other part to reward you or even really stop a defamation campaign after you make your sacrifice(s).
(b) You accept the inevitable conflict head-on and think of a strategy to rid yourself of your ancient master. You have put yourself in this position over years and there is probably no friendly way out of this. Likely you'll lose the support of anyone who sides up with the other part, which may include people you consider as friends. For at least a couple of years, expect this professor to seek to destroy you (you'll be an example), which may easily cost your current career plans. Do you consider joining the industry?
Personal advice: (a) could lead to humiliation followed by depression, but may well be the only way to save your current projects. I think the best strategy in (b) is to generate further revolt against said professor so this person suddenly finds itself with too many political enemies and thus cannot focus on you. Be assured that there is a bubble and this person is scared of it crumbling, as illustrated by the overreaction; so if you're lucky (a) could buy you time until (b) is embraced by others and you can backstab with a->b.
I do not think there is any intermediate path, as not clearly abiding to (a) tends to be perceived as (b) by the other part.
Sorry if too long or philosophical.