Preheat oven to 180°C.

Place nuts on an oven tray and bake about 8 minutes or until skins begin to split. Place nuts in a tea towel and rub to remove skins. Chop nuts coarsely.

In a medium saucepan, bring cream, milk and hazelnuts to the boil. Remove from heat, cover and stand 20 minutes.

Remove crust from base of bread. Cut bread into 1.5cm thick slices. Brush one side of each slice with butter. Arrange bread, butter-side up, overlapping slightly, in a shallow 2-litre (8-cup) ovenproof dish. Sprinkle raisins between layers.

Whisk eggs, sugar and extract in a large bowl until combined. Gradually whisk cream mixture into the egg mixture. Strain mixture into a jug and reserve nuts. Pour hot milk mixture over bread; sprinkle with reserved nuts.

Place dish in a large baking dish and add enough boiling water to baking dish to come halfway up sides of dish.

Bake pudding about 50 minutes or until set. Stand 10 minutes before serving.