Thanks for the extra information. The first thing that I would do would be to get the dog's anal glands checked - these are small glands which lie in the inside of the anus at about 4 and 8 o'clock. They contain a smelly scent fluid which is emptied onto the faeces as the glands are squeezed on the way out.
If for some reason, the glands are not naturally emptied when the dog defaecates, then the fluid can build up and the glands get impacted, over full or even infected, which is qute painful, irritable and itchy for the dog. The dog cannot get to these glands to scratch them because they are on the inside, and so they target the area around the tail base instead.
It is interesting that you describe the paw chewing too as this can be a symptom of the dog just chewing something to relieve the frustration. If you can get the dog's anal glands emptied by your vet this will certainly eliminate this very likely cause of the problem. If there is an infection there you may need antibiotics, otherwise just physical emptying of the glands can provide much-needed relief.
I would also recommend worming your dog too, unless he has been done in the last couple of weeks, as some worms can make the anus a bit itchy.
It might be worth using a buster or lampshade style collar on your dog too to try and break the cycle of biting the bottom and the paw - sometimes even after the initiating cause of itching etc. has gone, the dog can continue to do it out of habit.
There is, of course, a possiblity that there may be something more complicated going on with the skin on the back of the tail, such as a sensitivity or allergy, but by emptying the anal glands, keeping up the frontline treatment monthly and worming, you are treating by far the most common causes of this problem. If it persists after this, then I would consult your vet, as skin probelms can be quite difficult to resolve.
I hope these ideas help you both!