Preheat the oven to 180 degrees C. Grease the bottom only of one 23cm square baking pan. Drain the sour cherries, reserving the liquid.
Combine the flour, 1 cup of the sugar, baking powder and salt. Beat in the margarine and eggs at medium speed until well blended. Fold in the nuts and 1 cup of the drained cherries. Spread the batter into the prepared pan.
Bake at 180 degrees C for 35 to 40 minutes. Serve cake warm or cooled with cherry sauce spooned over the top.
To make cherry sauce: In a small saucepan combine 1/3 cup sugar, cornflour, remaining cherries and the reserved juice. Cook over medium heat, stirring occasionally until mixture is thick and clear.