1 1/2 c. sugar
1 c. unsalted butter, softened (2 sticks)
4 eggs, separated
1/2 c. water
1/3 c. granulated white chocolate
2 1/2 c. all-purpose flour
1 tsp. baking soda
1 c. buttermilk
1 tsp. vanilla extract

ICING:

3/4 c. evaporated milk
1/2 c. plus 2 tbsp. sugar
1/4 c. unsalted butter (1/2 stick)
1 tsp. vanilla extract
2 c. grated white chocolate

Cake: Cream sugar and butter until fluffy. Beat in egg yolks one at a time. Set aside.

In small saucepan over low heat combine water and white chocolate. Melt chocolate (do not scorch) and beat it into butter mixture.

Sift together flour and baking soda. Add to creamed mixture with buttermilk. Stir in vanilla. Beat whites until stiff but not dry; fold into batter. Divide batter among 3 lightly floured greased 9 inch round cake pans. Bake in preheated oven 20 minutes or until cake tested comes out clean. Let cool a few minutes before removing from pans.

Icing: In saucepan over low heat combine evaporated milk, sugar and butter. When butter is melted, simmer 1 minute. Stir in vanilla. Remove from heat and beat in white chocolate until completely melted. Let cool to a spreadable consistency.