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Does a UK shipmaster have any right or obligation to retain the crew discharge books in his/her custody?

No. 

Although it may be useful when inspectors want to see all crew documents, it is in fact a breach of regulation 22(3) of The Merchant Shipping (Seamen’s Documents) Regulations 1987, which provides that a person to whom a Discharge Book is produced must return it to the holder as soon as practicable after the entry has been made or after any inspection of it.

 

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How should a seaman be discharged from the Crew Agreement at the end of his tour of duty in a UK ship ?

Can a seaman demand any document from the master when he signs on?