Yes you can only buy Cuban Convertible Pesos (CuCs, as they are known to tourists) in Cuba. You get about 1.45 CuCs to the £ at the moment.
Cuba runs two currencies. As well as CuCs (which are only available to tourists and are the only currency that tourists can spend) there are also ordinary Cuban Pesos which are used by the Cubans. If you could buy these you would get about 30 to the £.
It all sounds a bit confusing but in practice it works perfectly well. You change yours £££s at the bank for CuCs and simply spend them where you wish. Beware, in some of the towns some establishments do not accept CuCs so you cannot do business there. But all the regular tourist haunts accept CuCs.