The final design has not yet been decided, but the pounds 2 coin will be two- tone, with a white centre. It will be bigger and heavier than the pounds 1 coin, but will not weigh as much as two pounds 1 coins together.
The new 50p piece will be a smaller and lighter version of the existing seven-sided coin introduced in 1969. The modifications will bring the 50p coin into line with the present 5p and 10p pieces, both of which have been made smaller and lighter in recent years.
The Royal Mint would issue the new coins towards the end of 1997, the Chancellor, Kenneth Clarke, announced in a Commons written reply yesterday.
Commemorative pounds 2 coins have already been minted to mark various occasions, including the 50th anniversary this year of the end of the Second World War. But the new coin will be the first new denomination to go into general circulation since 1983. It will bear the Queen's head on the front, while the design for the reverse will be selected by the Royal Mint Advisory Committee, which is headed by the Duke of Edinburgh.
The decision to introduce the new coins follows a lengthy consultation exercise on the future of the UK's small change involving the public and 1,000 different organisations, including banks, the retailing and vending industries, the blind and the elderly.
A spokeswoman for the Royal Mint said: "Broadly speaking people were happy to see the 50p reduced in size because it's quite a big coin. It does not fit in with existing coins any more.
"Generally speaking there's been a favourable reaction towards the smaller 50p coin and the pounds 2 one, although there are bound to be objections."
A pounds 2 coin was favoured above a note because of its durability and cost. "A note of that value was not considered appropriate because it would be expensive. They do not last as long as coins," the spokeswoman said.