Preheat oven to 350°. Generously grease and flour a Bundt baking pan.

Frosting: In a large bowl, beat cream cheese, butter and vanilla; mix well. Add sugar alternately with milk; mix well. Remove 2 1/2 cups of mix, place into a plastic sealable bag; set aside.

Cake: wirh mixer at slow speed, add eggs to remaining frosting; beat until blended. In separate bowl, combine flour, baking powder and salt. Add flour mixture to mix alternately with water; mix well.

Pour into pan and bake 65-75 minutes or until toothpick inserted in center comes out clean. Cool 30 minutes. While cake is stll warm, use a knife to loosen the cake edges from pan. Cool completely before removing from pan. Top with frosting.