I have lots of experience with these and some hard won knowledge! This is a selector problem and is covered in the Workshop Manual. Simply put, if you remove the outer cover you will see the selector mechanism in the middle left of the inner cover. There are a pair of holes in the outer plate of the selector which allow you to see the pawls of the selector ratchet. These must be equally spaced away from the inner ratchet plate, the thing with the square hole in the middle and teeth on the outside. The whole selector mechanism is on pillar screws, loosen these to adjust the gap accordingly. You can test ride it without re-fitting the outer cover so take a spanner and play with it. This should fix it, if not come back and I'll take you to the next step. This gearbox will never be wonderful but should be acceptable with careful adjustment! Once sorted it should stay in adjustment by the way...
I also have a 1970 S2 Interceptor as well as a Mk 1 and a 1A.
REgards, Mark