What you said
Treat everyone equally. Punish the behaviour of whichever child misbehaves without reference to the sly boy (he is exhibiting power-struggler behaviour and acting to undermine your authority). Punish the sly boy's misbehaviour without reference to other children; if possible deny him his audience. If necessary, involve senior staff and parents, and keep a record of every incident for evidence.
The kids who are influenced by the "sly" kid need to take responsibility for their own behaviour. Hopefully, they will realise when they get into trouble that "Sly" isn't as great as he seems. Moving the "sly" kid may help.
The expert view
Your word against his? If you work in a school where the word of a misbehaving child is taken as much as yours, you need to look elsewhere. Most schools will support you if you say that child X did behaviour Y, and you sanction the child for it. This isn't the High Court.
Use sanctions and rewards as appropriate, and in this case I would park the rewards a little in favour of sanctions. This child doesn't need nurturing; he needs to realise that his actions, while marvellous for attracting the awe of his classmates, are not appropriate. And the only person who will make him realise this is you.
Separate him from his peers. If he acts up, have a plan so he can be removed until he can behave properly. Few children enjoy isolation, so this is a tried and tested way to ensure compliance. If his friends disrupt the room, make sure they also experience sanctions: detentions, missed breaks, phone calls home and so on.
Step up. If you let this slide, it could infect the conduct of the others and you could see an escalation of challenge in the room.
Tom Bennett is author of The Behaviour Guru and Not Quite a Teacher. His latest book, Teacher, is out now, published by Continuum. http:behaviourguru.blogspot.com Post your questions at www.tes.co.ukbehaviour.