If I were you, I'd stay at the same place to finish the Master's then get the PhD. It seems as though he likes annoying you, although if he usually doesn't interfere when you do your work, it shouldn't matter. Sure he may get the same credentials as you do but remember, like you, he's going to need to apply it and when others realize he's lazy and is not up to par, he'll suffer while you don't.

If you work with him for your Master's, you may not have to work with him for your PhD although he still may be around to pester you. Besides, you got offered the PhD position while he hasn't, so he may not even be around with you much longer.