Katmol, where on God's green earth did you find this frankenbike?
My favorite method to remove stuck axles is a piece of hard wood and a decent hammer, no matter how much you belt the wood it should take all the damage and leave your axle intact.
You could also drift the axle back to its' original position then spray copious amounts of CRC or whatever you have in the USA as a spray on lube, the try belting it out again.
Man I wish I was there to give you a hand, I just love a challenge.

I'd say your rear wheel bearing is rusted solid and coming out with the axle.