A detailed study is presented of classical field configurations describing nonabelian vortices in two spatial dimensions, when a global SO(3) symmetry is spontaneously broken to a discrete group IK isomorphic to the group of integers mod 4. The vortices in this model are characterized by the nonabelian fundamental group π1(SO(3)/IK) =Q8, which is isomorphic to the group of quaternions. We present an ansatz describing isolated vortices in this system and prove that it is stable to perturbations. Kinematic constraints are derived which imply that at a finite temperature, only two species of vortices are stable to decay, due to ‘dissociation’. The latter process is the nonabelian analogue of the well known instability of charge |q| > 1 abelian vortices to dissociation into those with charge |q| = 1. The energy of configurations containing at maximum two vortex-antivortex pairs, is then computed. When the pairs are all of the same type, we find the usual Coulombic interaction energy as in the abelian case. When they are different, one finds novel interactions which are a departure from Coulomb like behavior. These results allow one to compute the grand canonical partition function (GCPF) for thermal pair creation of nonabelian vortices, in the approximation where the fugacities for vortices of each type are small. It is found that the vortex fugacities Work supported by Thai Government. e-mail:C.Kobdaj@qmw.ac.uk 2 e-mail: S.Thomas@qmw.ac.uk depend on a real continuous parameter a which characterize the degeneracy of the vacuum in the model considered. Depending on the relative sizes of these fugacities, the vortex gas will be dominated by one of either of the two types mentioned above. In these regimes, we expect the standard Kosterlitz-Thouless phase transitions to occur, as in systems of abelian vortices in 2-dimensions. Between these two regimes, the gas contains pairs of both types, so nonabelian effects will be important. The results presented should provide a starting point from which to investigate screening properties of the nonabelian vortex gas.