Has your son's reading improved with the tutor? If not, an evaluation may reveal that he has a learning disability. The school is obligated by law to provide an evaluation under Federal and State special education law -- all you have to do is ask. They may require that your child be brought up before a child study team before being referred for an evaluation, and that's a good first step. If he doesn't improve after the suggestions made by the child study team are implemented, then insist (in writing) on a formal evaluation. If there is a finding of special need, the school is also obligated to provide appropriate services, which may include specialized instruction by a qualified special education teacher.
If your child is showing gains in reading and writing with the tutor, this suggests that he has the ability to do better in these important subjects when he has the right kind of instruction. I would suggest that the tutor talk with the teacher about the gains, so that the teacher is more likely to see your son as a student who can, rather than one who can't. This is especially true in such a large class, where some teachers are drawn to the children who exhibit the potential for success. Also, communication between the tutor and the teacher will help to insure that the methods they are using are compatible. You don't want the teacher teaching reading and spelling one way and the tutor teaching another way -- that will just confuse your child more.
Above all, it's important for your son's teacher to know that he has already developed such a poor self-image around reading and spelling. His teacher needs to provide an environment in which children know that it's OK (even expected) to be reading and spelling at different levels. You might want to ask the school guidance counselor or psychologist (the professionals who specialize in ways to help kids feel better about themselves) to check in on your son. He or she should be able to give the teacher some ideas about helping your son feel more comfortable in school. Without some intervention, a problem like this can get out of control and your son may find it increasingly more difficult to get himself to school. Intensive tutoring over the summer can do wonders to build a child's skill and his self-concept, so keep that tutor on board and increase her services if you can afford it. If finances are an issue, find out if the school offers a summer program which is both fun and educational.