Does PE have to have an allocation of 2 hours per week per pupil (Key stage 1 - 4) on the school time table?

No. However a school should determine their programme of study and decide on the minimum time that is needed to deliver the outcomes of the subject to all pupils. Good practice and evidence from various reports suggests that 2 hours is the minimum entitlement for all pupils in order that they reach the expected outcomes for their age and/or stage.