Any fairly crumbly, old-fashioned fudge is good for this cake but if you have the choice, salted fudge works particularly well.
To make the cake, preheat the oven to 190C/375F/Gas 5. Butter two 20cm/8in loose-based sandwich tins and line the bases with discs of baking parchment.
Put the walnuts in a food processor and blend on the pulse setting until chopped into very small pieces, but not at all fine or powdery. Don’t worry if there are a few larger pieces of nut remaining, these will add texture to the sponge. Tip the nuts into a bowl.
Put the butter and brown sugar, eggs, flour and baking powder into the food processor and blend on the pulse setting until well combined. You may need to remove the lid once or twice and push the mixture down with a rubber spatula. (If you don't have a food processor, tip all the ingredients into a large mixing bowl - then beat like hell!)
Add the chopped nuts to the batter and mix until just combined. Spoon the mixture evenly into the two tins and smooth the surface. Bake on the same shelf in the centre of the oven for 25 minutes, or until well-risen and just beginning to shrink back from the sides of the tin.
Remove the tins from the oven and leave to cool for five minutes before running a knife around the edge of each cake and turning out onto a wire rack. Peel off the baking parchment and leave to cool completely.
To make the icing, put the butter in a food processor, or mixing bowl, add the icing sugar and 150g/5½oz of the chopped fudge. Blend until the icing is smooth and creamy. Add an extra 2-3 teaspoons of milk if necessary, so that the icing is light and spreadable. Don’t worry if some of the fudge remains chunky.
Place one of the sponges onto a plate or cake stand and spread with half of the fudgy icing. Top with the second sponge and spread with the remaining icing, creating soft swirls and peaks. Decorate with the walnut halves and chopped fudge.
