In a small mixing bowl, dissolve yeast and sugar in the warm water. Let stand until creamy, about 10 minutes.
In a large mixing bowl, combine the yeast mixture with the milk, the butter or margarine, flour and the salt; stir until well combined. Mix and when the dough has pulled together, turn it out onto a lightly floured surface and knead until smooth and elastic, about 8 minutes.
Lightly oil a large mixing bowl, place the dough in the bowl and turn to coat with oil. Cover with a clean damp cloth and put in a warm place to rise until doubled in volume, about 1 hour.
Preheat oven to 200 degrees C.
Deflate the dough and turn it out onto a lightly floured surface. Divide the dough into two equal pieces and form into loaves. Place the loaves into two lightly greased 23x12 cm loaf tins. Cover the loaves with a damp cloth and let rise until doubled in volume, about 40 minutes.
Mist loaves with water and bake for 20 to 30 minutes or until the loaves are golden brown and the bottom of a loaf sounds hollow when tapped.