Two-dimensional numerical simulations of intermediate wavelength (100--1000 m) E¿B gradient drift instability in local unstable regions of large F region ionospheric plasma clouds have been performed using an initial one-dimensional cloud geometry, for plasma cloud density gradient scale lengths L=3, 6, 10 km. For conditions typical of 200-km barium releases we find that linearly unstable modes saturate by nonlinear generation of linearly damped modes along the y direction (parallel to E¿B drift). In the nonlinear regime, power laws are observed in the one-dimensional parallel P(k1)∝ky-n and perpendicular P(kx)∝kx-n power spectra with n?2--3. These results are compared with in situ experimental measurements and theoretical predictions.