Can pay-later instructions offer html format and plain text versions?
You should be able to apply the strip_tags modifier to the {$pay_later_receipt} tag in your message template(s) in the text-only version.  As that page says, you might also consider the replace and replace_regex modifiers to handle newlines, etc.

Alternatively - modify the template to insert the "Pay Later" instructions directly into the template exactly as you like.