Hindsight is a great thing, but I'd have bid 317,500 and said 'I just can't afford to go over the stamp duty threshold so if the seller would prefer to accept my bid cos my circumstances suit them better, that'd be great, but unfortunately I can't go any higher'.
That way you'd have called his bluff if he was bluffing. It sounds like the house is proving hard to shift, so you may want to reconsider lowering you bid to 317.5 as it'd save you a fortune. You can always up if later if needs be, but be sure to make it sound like you just can't afford to go higher than that.