1.Preheat oven to 180°C. Lightly grease a deep, 20cm round cake pan. Line base with baking paper. Beat butter, sugar and vanilla together in a large bowl using an electric mixer, until pale and creamy.
2.Add eggs one at a time, beating well after each addition, scraping down sides of bowl.
3.Lightly fold flour into creamed mixture alternately with milk, beginning and ending with flour.
4.Spoon mixture into prepared pan, smoothing top. Bake for 40-45 minutes, or until cooked when tested. Cool in pan for 5 minutes, before turning onto a wire rack to cool completely.
5.Sift icing sugar into a bowl. Add butter, water and vanilla. Beat well with a wooden spoon until a smooth, spreadable consistency. Spread over cooled cake. Decorate if desired.
Make sure butter is well creamed before adding sugar. This incorporates air and makes for a lighter cake. Use unsalted butter at room temperature, if preferred. For a richer cake, use 185 grams unsalted butter, 3 eggs and reduce milk to 1/4 cup. Continue as directed.