Preheat oven to 180°C (160°C fan-forced). Grease and line the base and sides of a 20cm cake tin.
Beat butter and sugar using an electric mixer until pale and creamy. Add eggs one at a time, mixing well between each addition. Mix in the vanilla.
Gradually add the flour, baking powder and bi-carb soda, alternately with the buttermilk. Mix until batter is smooth. Pour into prepared tin and smooth the top. Bake for 60-65 minutes, or until an inserted skewer comes out clean. Allow to cool in the pan for 10 minutes before removing to a cooling rack to cool completely.
For the icing, place butter in a large mixing bowl. Beat with electric beaters until soft and creamy. Gradually add icing sugar and water until the mix is smooth.
Ice cake once cool and keep in a sealed container in the refrigerator after the first day.