I am sorry to hear about this development. It sounds like your grandson wants to avoid responsibilities and this happens usually when someone is afraid of failure as you very well said. We can't possibly know how this fear developed but what you said about his father pressurising him to do well in sports could well hide some truth behind him. So it is possible that he feels that his father has too many expectations of him and this thought creates a panic reaction which leads to avoidance. Obviously by avoiding going to school he avoids exposing himself to failure. It sounds that his relationship with his father is very complicated at the moment and perhaps holds the key to this development. You mentioned that they seemed close the last few years because they were doing activities and sports together. However, you can't possibly know how his son felt during this time and how pressurised he felt. It could also be that he is trying to challenge his father with his behaviour, possibly to test him and see if his father still loves him when he is not succeeding in things. You also mentioned that his mum has rather kept a more passive role with him. This would also need to change. However, I do think that family therapy would be very productive in this case. Your grandson would need to be heard. He needs to verbalise his feelings, his hurt and the relationship between him and his father to be mended. However, it sounds like his father needs to do a lot of work himself and to acknowledge some things and then change his behavior towards his son. I would suggest that the approach towards him should be a very empathetic and understanding approach. There should be no criticizing from anyone. On the contrary, the approach needs to "say" that we only want you to be happy and we will not love you more if you are good at something. Both parents need to understand that his behavior is communicating something to them. Family therapy would help in to that message being verbalized instead of acted out e.g by refusing to go to school. He needs to be encouraged to express all his complaints, feelings and thoughts but by verbalizing them. It could also help if his parents, acknowledged their mistakes and apologized for those. That would be great if it could happen in the family therapy session.
Again, you could have a supportive role in this, without necessarily talking to your grandson about his refusal but about anything else in his life, friends, other activities etc. just in an effort to relate to him since he sounds that he has rather cut off his communication with his parents.
In all cases, these situations can take some time to resolve even with the proper intervention. Changes will not happen overnight and everyone needs to be on board with any intervention.
I wish you and the family all the best