Can I just change the master cylinder to the dual circuit one that covers series 3 up to 1980 as an optional upgrade (apparently dual circuit was optional in the 70s)
yes i have done it, you will need the appropriate master cylinder, and there is a unit dont know what its called allows more pedal power to go to front brakes than back, it bolts on chassis aroud the bulkhead bracket area
That valve is called a shuttle valve, and it's not really for pressure differentials...
Its purpose is to close off a defective brake circuit in the event of failure of a part of the hydraulics. If you pop a flexy or crack a line the circuit it is in will not develop pressure, though the other will. The spool inside the shuttle valve, driven by the pressure in the good side of the system, will move and close off the defective side, leaving you with at least half of a braking system to work with.
Yes, you want one of these.
Problem is last I checked they're not available new or at a horrendous cost. They are however easy to overhaul (a few copper washers and O-rings) if you can find a used one on a dual-circuit vehicle pre-metric rationalization (1980?).
Barring one off a Rover, older Volvos with Girling brakes used nearly the identical valve - my 71 164 had one.