I really fancy this guy who i work with and i use to go to school with him. I've only really got to know him since we have started working together, as we never really use to talk in school.
We get on really well and he always makes me laugh and anytime we are on a break, he always comes and sits down beside me.

Well he must want to be with you for some reason, otherwise he will sit somewhere else.

Also anytime we see each other in work he always comes to talk to me or I always go over to see him. But i normally have to strike up the conversation.

Quite a few men are not good with conversations, women are the more communicative sex (there are some exceptions, but in general, conversation is seen as a female trait).

In work i sometimes catch him looking over at me and he has caught me doing the exact same. He also gives me a wee smile when i see him or he sometimes gives me a cheeky grin followed by a wave. We both always joke around with each other and make playful comments about each other.
Everytime i see him my heart skips a beat and i feel myself blushing. I also notice when we are talking he touches and rubs his neck and he fiddles slightly! are these good signs???

Everything you have said so far has been positive signs.  Rubbing his neck is definitely a positive sign because it shows that he wants to touch you.  Fiddling with objects is usually a good sign as well, as long as it is stroking and caressing objects and not slamming and banging objects.

But im really confused whether or not he's into me and we only really see each other in work!

From what you have said he certainly likes you. You haven't given me any reason to even doubt it, he's showing so many signs that it's pretty much conclusive.

I really wish their was a way to know or if he would even give me a sign!

It sounds as though he is giving you plenty of signs already that he fancies you.  It's always frustrating not knowing for sure but you have to be objective about the positive and negative signs.  And in this case you have given me nothing but positive signs that he does fancy you. 

Because i really dont want to make the first move, incase he knocks me back.

It's always risky making a move because of the potential humiliation but ultimately one of you has to be brave, to make that final move.  Otherwise you will feel humiliated for the rest of your life when you look back and think I wonder if he did fancy me.   You have just got to pick your opportunity correctly.  Indeed you don't have to say verbally that you fancy someone.  What you need to do is keep enjoying each others company, when the opportunities come to move things a bit further you have to be spontaneous and take those opportunities.  For example when the opportunities comes to get close to him and even touch him, you have to take it.  The opportunity to go somewhere outside of work comes and you have to say I fancy doing that, see if he bites.  You could be laughing in close proximity with each other, your eyes meet and you take the opportunity to kiss.

A guys job is made even more difficult by the fact that some women flirt for fun and some women play games like indicate they are interested then back off and treat him as if they don't fancy him.  All this just leaves a guy confused and he lacks the ability to trust women or trust his judgement of whether a woman fancies him.  So sometimes you may get a guy that is not a professional with women and he might persuade himself you're messing with him and that he is reading the signs wrongly.

I've felt this way about him for many months and its driving crazy!

It's not necessarily a woman's job to make the final move, though if women are brave enough they can be successful.  I know some of my previous posters on this site have successfully made a move on their guy and got their man, if you don't try you will never find out.  But really at the very least women should do a lot of the suggesting, suggesting to him that he has a pretty good chance of successfully asking you out.  A guy is in the same boat if he asks you out and you say no, he will be upset, humiliated and if other women find out he will be dished by all of them as well.