ECU has to be returned?

I have a Defender 180Xtreme which broke down last week. The Land Rover specialist (not a dealer) who is mending it - I've not used them before - says the ECU is to blame, it is completely dead and doesn't respond and he has to fit a new one. I asked for the original one back to see if I can get it mended, but he says he has to send it back to Land Rover - that if you get a new one, the broken one goes back. This sounds very dubious to me, especially as the original one had been chipped. Should I believe them?

no

He probably got the new one on an exchange basis, not necessarily from LR.
For other electrical stuff there are often places that do refurbished units, but they have to insist on the old unit to keep the supplies going.
You might want to take the chip out for your new unit. Have a word with the company that did the chipping if it wasn't you. It could be their handling of the unit or the modifications they made were responsible for its demise though.

There is generally a large surcharge on Ecu's from LR - pay the surcharge,keep the unit.