Preheat oven to 180 degrees C. Grease a 22x33cm cake tin and line with baking paper.
Cream together the butter and sugar until light and fluffy. Add eggs one at a time, beating well after each addition.
Combine flour and baking powder. Gradually sift dry ingredients into the wet mixture, mixing after each addition.
In a separate bowl, place about a cup of the cake batter. To this, gradually stir in the milk until smooth and creamy. It should have the consistency of thick pancake batter.
Spread the first cake mixture into the prepared tin and smooth out with the back of a spoon. Spread the apple sauce on top of this in an even layer. Finally, spread the second cake mixture over the apple sauce.
Bake in the preheated oven 50 minutes or until the top of the cake is a deep golden brown. Remove, let cool and dust with icing sugar before slicing.