Beat the egg and add milk to equal to 1 ½ cups of liquid. Beat together.
Sift the flour, sugar and salt; add the yeast.
Fold into the liquids and water and knead into a smooth dough. Cover and place in a greased bowl.
Allow to rise for one hour or until it is double in size.
Turn dough out and place in a greased pan and allow to double in size again.
Bake in a preheated 350 degrees F (or 180 degrees C) oven for 40 minutes or until golden and firm in the centre.
Remove and allow to cool on a rack before serving.