Preheat oven to 180 degrees C. Grease and flour two 20cm round cake tins. Mix together the flour, baking powder and salt. Set aside.
In a large bowl, cream together the butter and sugar until light and fluffy, about 5 minutes. Beat in the eggs one at a time, then stir in the vanilla. Beat in the flour mixture alternately with the milk, mixing just until incorporated.
Pour batter into prepared tins. Bake in the preheated oven for 30 minutes, or until a toothpick inserted into the centre of the cake comes out clean. Allow to cool in tins on wire racks for 10 minutes. Then invert onto wire racks to cool completely.
To make the lemon curd filling: in a medium saucepan, mix together 1 tablespoon lemon rind, 1/2 cup lemon juice and 1 tablespoon cornflour until smooth. Mix in the 120g of butter and 3/4 cup sugar, and bring mixture to boil over medium heat. Boil for one minute, stirring constantly.
In small bowl, with a wire whisk, beat egg yolks until smooth. Whisk in a small amount of the hot lemon mixture. Pour the egg mixture into the sauce pan, beating the hot lemon mixture rapidly. Reduce heat to low; cook, stirring constantly, 5 minutes, or until thick (don't let it boil).
Pour mixture into medium bowl. Press plastic wrap onto surface to keep skin from forming as it cools. Cool to room temperature. Refrigerate 3 hours.
To make the icing: In large bowl, beat the icing sugar, 125g butter, 2 tablespoons lemon juice and 1 teaspoon lemon rind until smooth. Beat in milk, and increase speed and continue to beat until light and fluffy.
To assemble: With long serrated knife, split each cake layer in half horizontally, making 4 layers. Place 1 layer, cut side up, on a serving plate. Spread with half of the lemon curd filling. Top with another layer, and spread with 1/2 cup of icing. Add a third layer and spread with remaining half of the lemon curd filling. Press on final cake layer, and ice top and sides of cake with remaining frosting. Refrigerate cake until serving time.