It seems, there's no satisfying way for a decent character.
I tried to stop him, but all the Droughs side with him instantly and they make short work of my party. Especially the sergeant deals a ridiculous amount of damage.
So I sided with him, which I didn't want to do. He got pushed into the lava, so I didn't even get his loot and still, I had to fight the whole dwelling. My party barely survived.
I tried it with my warlock, Shadowheart, Karlach and Tristarion. All level 5.
I made a deal with
the duergar elder and his rebels, killed the orb by luring it down a set of stairs and thus ensured the rebels' help.
That made the fight quite doable for me (level 5 party: Fiend warlock, Lae'zel, Shadowheart and Gale)
This seems to be the way the game intends you to do it for nice characters. The fight is mega hard otherwise.
For less nice characters: You can also kill everyone else in the room first before you let him out. Alternatively, fast travel or rest twice and come back, the duergar all leave if Nere suffocates, but leave his loot.
