Place pieces of chocolate in a bowl over a pan of gently simmering water and heat, stirring frequently, until melted and smooth. Remove the bowl from the pan.
In a large bowl, combine the flour, butter, milk, baking powder, egg and caster sugar. Using an electric mixer, beat the ingredients until well-blended, occassionally scraping the bowl with the rubber spatula. With your hands, shape half the dough into a ball, then wrap and refrigerate for 2 hrs or until the dough is firm enough to handle. Alternatively, place the dough in the freezer for 40 mins.
With an electric mixer, beat the melted chocolate into the dough remaining in the bowl until blended. Use your hands to shape the chocolate dough into a ball, wrap and refrigerate for 2 hrs.
Grease and flour 2 large baking sheets. On a lightly floured surface, use a floured rolling pin to roll out half of the plain dough 3mm (1/8-inch) thick. Keep the remaining dough refrigerated. Using a floured 8cm (3¼-inch) heart-shaped cutter, cut the dough into hearts. Place the hearts about 5mm (¼-inch) apart on one baking sheet. Repeat with remaining plain dough and trimmings, then repeat with the chocolate dough, placing hearts on the second baking sheet. Refrigerate until the hearts are firm - about 20 mins.
Preheat the oven to 180°C (350°F/gas mark 4).
With a 2.5cm (1-inch) heart-shaped pastry cutter, cut a small heart in the centre of each plain and chocolate heart biscuit and set the small hearts aside. Use a 5cm (2-inch) heart-shaped pastry cutter, cut another heart in the centre of each biscuit. Remove the medium-sized hearts from each plain biscuit and replace it with one from the chocolate biscuit. Fit 2.5cm (1-inch) plain hearts into the centre of the medium-sized chocolate hearts then repeat with the 2.5cm (1-inch) chocolate hearts and medium-sized plain hearts.
Sprinkle the biscuits with sugar and bake them for 10 mins or until golden. Using a fish slice, transfer the biscuits to wire racks to cool. Store in an airtight container.