I really need some advice about this!!!

I have a 7mth old jack russell cross, who i have had from 8wks old. He is a lovely pup and great fun but i'm having problems discouraging him from rough play and nipping/biting at my 3 year old son.
Whenever we are at home or out, and my son is running around the dog follows and i have found that he nips and bites at him (he has made holes in a few t-shirts/jeans grabbing him like this), i have tried telling him no, putting him out back when he does this, or if out putting him on shorter lead so he can't reach, but nothing seems to work. At home the other night my son was lying on sofa watching DVD when he leaned over and dog jumped up nipping his face!!!!! Luckily my son pulled away and there was only a red mark that faded quite quickly, but i'm now getting really worried that he may bite my son.
Does anyone have any ideas??? I love my dog but if he doesn't stop soon i can't risk him being around my son!!!! I feel like i've failed my pup!!!