1.Preheat oven to 180ºC/160ºC fan-forced. Grease shallow 22cm-square cake pan; line base and sides with baking paper, extending paper 5cm over edges.
2.Beat spread and sugar in medium bowl with electric mixer until changed to a paler colour. Beat in eggs, one at a time. Stir in milk, ground hazelnuts, sifted flour and cocoa, in two batches.
3.Spread mixture into pan; bake about 20 minutes. Stand cake in pan 10 minutes; turn, top-side up, onto wire rack to cool.
4.Meanwhile, make fudge frosting. Stir caster sugar, spread and the water in small saucepan over low heat until sugar dissolves. Transfer to medium bowl; gradually stir in sifted icing sugar and cocoa until smooth. Cover; refrigerate 20 minutes. Beat frosting with electric mixer until spreadable.
5.Spread cold cake with frosting.