Preheat the oven to 325°F (160°C).

Lightly grease an 8x8 inch (20x20 cm) baking dish and set it aside.

In a large mixing bowl, whip the egg whites until stiff peaks form. Set aside.

In another mixing bowl, beat the egg yolks and powdered sugar until pale yellow.

Mix in melted butter and the tablespoon of water for about 2 minutes until evenly combined.

Mix in the flour until evenly incorporated.

Slowly beat in the milk and vanilla extract until well combined.

Fold in the egg whites (1/3 at a time, then repeat until all of the egg whites are folded in).

Pour the batter into the prepared pan and bake for 40-60 minutes, until the cake is barely jiggly in the center. Baking time might vary depending on the oven or pan you use, but start checking after 40 minutes. If the top browns too quickly before the minimum of 40 minutes, you can cover the cake with aluminum foil.

Cool the cake completely before dusting it with powdered sugar. Even when cooled, it will still be slightly jiggly because of the custard layer in the center.