In 1997 Gibraltar released a new circulating denomination: a bimetallic two pound coin. This was in line with the UK, which also tried to introduce its own two pound coin in 1997; however, the electronic signature of the UK coins was wrong, so their issue was postponed until 1998, although the 1997-dated UK coins were also eventually released.
The reverse of the Gibraltar two pound coin shows Hercules strangling the Nemean lion. I do not know to what extent this coin circulated; if Gibraltar had retained its one pound banknote, then it is likely that banknotes would have been more popular than coins, but I have no knowledge of the situation on the ground in Gibraltar at that time.
ALL two pound coins of Gibraltar have a reeded edge and NO edge inscription.
For other 2 pounds issues, see:
Gibraltar: Some 1, 2 and 5 pound commemoratives.