> I ask people who approach him to give him a treat
Ask people NOT to approach him. There will be a point at which he starts to get uncomfortable with a stranger approaching him, do not let the stranger get any closer than that and idealy, stop them just before they get to that point. Let
pup go to the stranger. Stranger can drop treats
on the floor if it is not pushing pup over his limits.
Depending on how feearful pup is, treats may be best gently tossed away from the stranger onto the floor, so pup doesn't have to approach stranger to get them.
At this point, the treats are about making a positive association between the
presence of stranger and pup, not about pup interacting with stranger.
Things need to be taken slowly, pup may suprise you and make progress quickly if he is not pushed out of his comfort zone, but if you try to rush things with him, it can make him worse and make the problem much harder to deal with.
> outside he is so nervous
How about doing things like just sitting outside for 10or15 mins a couple of times a day with him. Not walking anywhere, not meeting people/dogs, just for him to take in all the different sights & sounds of the world (on your front lawn if you have one). You could chuck in some basic obiedience - things he allready knows how to do, simple things like 'sit', with a reward for sitting.. Little things like this can help give him a general little confidence boost outside.