Hello Sjakeman,
My dad's driving got noticeably worse long before he was diagnosed. It became obvious that he'd kill himself or someone else so the car had to go. The hardest hurdle we've had to cross so far, persuading him to do the right thing whilst taking away his independence as well as denting his ego. He finally drove off one day with my mother shouting after him that she'd call the police. He returned sheepishly 20 mins later and surprisingly agreed to give it up yet it stayed in the garage for quite a while and he kept going to look at it. This wasn't getting rid of the problem. I'd also considered disabling it in some way as has already been suggested (maybe that's a kinder option). We'd tried every angle conversation-wise but it didn't work so we prepared ourselves to take the hard line rightly or wrongly.
As a driver myself I could understand how he must have felt but we took a deep breath and told him to arrange for a buyer to call as soon as possible which he did. I went along to witness the sale to make sure he wasn't being taken advantage of. I helped him with the transfer paperwork, the car went and he hasn't mentioned it since although I often wonder what goes through his mind when he sees me driving mine.
Once he agreed, the rest was easy so I know we were lucky in that respect. I'd had some hair-raising rides as a passenger in his car and knew that people's lives were at risk. The sense of relief once my dad's car was gone for good was huge for us but it's never going to be easy so I sympathise with you.
Begin with a gentle person to person approach. Avoid criticising his driving skills and try to empathise but explain the safety issues. If he's not accepting and you can't get him to see that it's for the best then your dad's anger has to be secondary to the safety of himself and everyone else and the sooner he stops driving the better but you already know that. You could suggest using his bus pass if he has one and letting 'someone else do the driving for a change while he enjoys the view'. But personally I'd find a way to get rid of it even by devious means. He may blame someone initially but once it's done, it's done then hopefully, out of sight, out of mind although naturally he may well react differently.
Best of luck.
George.