I would say it's quite likely that your nephew hurt the cat (probably accidentally), so the cat is now afraid of children/babies.
I would probably put softpaws on the cat and/or make sure the claws are clipped regularily so that they are blunt (don't declaw though, that'll just cause a ton of personality problems for the cat and make him bite more and harder most likely).
Then keep him under strict supervision and controlled exposure to the baby. The baby will smell of you and be a part of the family so he may well learn that your baby isn't dangerous and he doesn't need actively to defend himself from it.
It'd probably be a good idea of taking things that smell like the baby (blanket etc.) and putting it near the cat or when good things happen to the cat (treats, petting, food etc.) so that he'll learn to associate nice things with the baby smell etc.
Basically do a little bit like you'd do to do a very slow introduction to a new cat. I'm sure more people can chime in here. Great of you to look for help now rather than immediately giving up on the cat.
It might happen that the cat is just too terrified of babies and it won't work at all, in which case it'd be best for everyone to rehome him but you should give it a few weeks at least, it can take time for cats to be used to new things.