Place the flour, sugar, salt and powdered milk in a large bowl. Crumble in the yeast, making sure it doesn't touch the salt. Add the egg and the water and knead with your hands until the dough is firm, it will be quite dense at this point. Add the softened butter and knead until it is fully mixed in.
Knead the dough until it is smooth and elastic. Shape it into a ball, cover with cling film and place in the fridge for at least 2 hours.
Ten minutes before your pastry is ready to come out of the fridge, place your remaining block of butter in the freezer.
On a floured surface roll out the dough to a rectangle that is 6mm thick.
Place the butter between two pieces of greaseproof paper and roll it out into a rectangle half the size of the dough.Arrange the dough so a short edge is facing you and place the butter on the bottom half of the dough. Press the edges of the butter into the dough with your fingers. Fold down the top half of the dough to completely enclose the butter.
Turn the dough 90 degrees clockwise. Roll out the dough lengthwise until it is 7mm thick.
Fold up the bottom third of the dough, fold the top part of the dough down so it touches the edge of the dough. Then fold the dough in half, encasing the edges so that they are on the inside of the fold.
You should now have four layers of dough, if you look at the side. Cover in cling film and place in the fridge for 1 hour.
Take the dough out of the fridge, roll it out to a rectangle about 7mm thick. Fold the bottom third up and the top third down to cover the bottom third, like a letter. Cover with cling film and chill for 1 hour.
***Make the Almond Paste***
Combine the ground almonds and icing sugar in a medium bowl. Add the milk and egg yolks and beat with a wooden spoon to make a firm paste.
Take the dough from the fridge and cut it in half so that it is easier to work with. Wrap the other half in clingfilm and return it to the fridge.
Roll out half the pastry into a rectangle that is 32cm by 16cm approximately 4mm thick. Cut the rectangle in half lengthways so you have two 8cm by 32cm strips. Using a sharp knife cut each rectangle into 8, 8cm squares.
Place about 1 tsp of the almond paste into the centre of each square, fold the corners of the pastry into the centre and press the almond paste down. This should give you squares with loosely open corners.
Repeat the same steps with the other pastry in the fridge.
At this stage you can place the pastries on a baking tray and let them prove for around 2 hours, or you can freeze these pastries for baking at a later day.
If freezing, freeze the pastries flat on a baking tray and when frozen, place them in a ziplock bag. When you come to cook the pastries allow them to defrost overnight in the fridge and then prove them for 2 hours in a warm area.
When the pastries have doubled in size, brush them with an egg wash and scatter them with flaked almonds.
Cook the pastries for 12 to 15 minutes at 180C until they are golden brown.
Allow the pastries to cool on a wire rack and make the almond glaze by mixing together the icing sugar, milk and almond extract until they form a smooth glaze.
Drizzle the glaze over the top of the danishes and allow them to cool.