You will have to modify the jira-project-config bundled plugin and remove the web-items for release operation. See this link for some help on editing bundled plugins : http://www.j-tricks.com/1/post/2012/05/modifying-atlassian-bundled-plugins.html
These are the steps that I followed:
1. Copied the zip file "atlassian-bundled-plugin" to a different folder and extracted it in that folder
2. Extracted the jar "jira-project-config-plugin-5.0".
3. Made changes to the file "atlassian-plugin.xml" by removing the following piece of code:
<web-item key="view_project_release" name="Release Version Operation"
<label key="admin.manageversions.release" />
4. Recreate the jar "jira-project-config-plugin-5.0" with the modified file "atlassian-plugin.xml".
5. Recreated the zip "atlassian-bundled-plugin" with the modified jar "jira-project-config-plugin-5.0".
6. Placed the zip file at the location WEB-INF/classes.
7. Restarted JIRA service.
What this did was it removed the "Release" option but the "Build and Release" option was still visible.
Please let me know if I had gone down the wrong lane.
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