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Sift flour and baking powder together.
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Cream the butter thoroughly. Add sugar gradually, continuing to cream until light and fluffy.
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Add egg and beat thoroughly.
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Add nuts. Stir in dry ingredients alternatively with milk, to which vanilla extract has been added, small amounts at a time.
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Beat after each addition until smooth. Pour into greased square pan (8"x8") and bake at 180C for 50 minutes.
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OR:.
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Bake in a greased loaf pan at 180C for 1 1/4 hours.
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Spread with honey-nougat icing.