Fearful mini schnauzer

Question
I hope you can help me I have a ten month old mini schnauzer which I have had since he was eight weeks old. The problems I have with him are that when I take him on walks he barks and lunges at everyone we meet. Even when he is in the garden he will run to the gate and bark like crazy at everyone that passes. If people come to the house he will hide behind me and it takes him a while before he will greet them. I have tried spraying him in the face with water when he barks he will stop for a second then starts again. He has been to puppy classes when he was younger but nothing helps, its got to the point I dread walks bcause of his constant barking at people how can I handle it? Any tips would be appreciated I want to walk him more but am a nervous wreck. By the way he has been neutered.  Thanks

Answer
Your dog has not been adequately socialized and your methods of dealing with his obvious fear have made it worse.  Dogs respond to calm, consistent leadership.  At ten months of age, the window of opportunity for socialization (which means: take the puppy out every day, seven days a week, to meet/greet other dogs, people, etc. through age two) is closed, you now have to rehabilitate the dog's fear.  Approaching people can be frightening to a timid dog (by your report, your dog appears shy), spraying him in the face further startles him and creates a more pronounced fear reaction, also it erodes his trust in you, his primary caregiver.  Puppy classes are intended for socialization (puppy kindergarten) but are NOT the first and last method used to create a happy, friendly dog.

In the UK there are many behaviorists who are credentialed by the government.  You need some education regarding how to proceed with this dog whose fear may someday escalate to aggression.  I can't do this in a text box.  I suggest you find a behaviorist/trainer at one of the following sites:
http://asab.nottingham.ac.uk/accred/reg.php
http://www.apbc.org.uk/members.php

In an hour or so, this behavior expert can evaluate your dog's temperament and interview you regarding training you have done, or not done, and also observe the dog outdoors to assess his reaction(s) to others during walks.  This is not a quick fix: you will have to work for months to make this dog comfortable and happy during his walks.  Your expert might also recommend a good positive reinforcement training venue in your area.  A brief introduction to what goes wrong between dog owner and dog can be seen in the following video where Dr. Ian Dunbar discusses the problems that dogs develop due to insufficient or inappropriate training:
http://www.youtube.com/watch?v=wTkYvn1HjrI&NR=1&feature=fvwp

Meanwhile: STOP what you're doing.  Observe your dog and at the FIRST SIGN of his distress, change direction quickly several times (walk in a circle left, then right), reward the dog with a tidbit of treat when he is obviously watching YOU and NOT reacting to the oncoming person.  Prevent any further development of his fear behavior while you look for an expert who can help you, in person, to change the dog's motivations.