Step 1

Whisk yeast, sugar and warm water in a small bowl until yeast is dissolved. Set aside in a warm place for 5 minutes or until mixture is frothy.

Step 2

Combine flour, extra sugar and salt in a large bowl. Make a well. Add yeast mixture, butter, milk, egg and vanilla. Mix well until a soft, sticky dough forms. Turn dough onto a lightly floured surface. Knead for 2 minutes to form a smooth ball. Place in a lightly oiled bowl. Cover with lightly greased plastic wrap. Stand in a warm place for 1 1/2 hours or until doubled in size (see Notes).

Step 3

Punch dough down. Turn onto a lightly floured surface. Knead for 2 minutes. Add a little extra flour to surface. Roll out dough until 1cm thick. Using an 8.5cm round cutter, cut rounds from dough (see Notes). Using a 3.5cm round cutter, cut rounds from the centre of each large round. Place both rounds onto 2 baking paper-lined trays. Stand for 20 minutes.

Step 4

Meanwhile, place oil in a large, deep saucepan. Heat over medium-high heat.

Step 5

Make cinnamon sugar: Combine sugar and cinnamon in a bowl.

Step 6

Cook doughnut holes, in batches, turning for 2 minutes or until golden and puffed. Using a slotted spoon, transfer to a plate lined with paper towel to drain for 10 seconds (see Notes). Toss doughnut holes in cinnamon sugar to coat all over. Place on a plate. Serve warm or set aside to cool.

Step 7

Cook doughnuts, in batches, turning for 3 to 4 minutes or until golden brown and puffed (see Notes). Using a slotted spoon, transfer to a plate lined with paper towel. Set aside to cool completely.

Step 8

Make Glace icing: Sift icing sugar into a bowl. Add boiling water, stirring until a thick spreadable icing forms. Separate mixture into 4 bowls. Tint portions with food colouring.

Step 9

Place doughnuts on a wire rack over a tray. Drizzle with icing. Decorate with hundreds and thousands. Set aside for 1 hour or until set. Serve.