Preheat the oven to 180°C, gas mark 4. Grease and line 2 x 20cm loose-bottomed cake tins.
Using an electric hand whisk, beat the butter and sugar until light and fluffy. Gradually whisk in the eggs, then coffee, until well blended.
Sift over the flour and baking powder and gently fold into the mixture with the chopped walnuts. Divide between the 2 cake tins, level off the surface and bake for 20–25 minutes until just set. Turn the cakes out onto a wire rack and leave to cool completely.
Meanwhile, to make the frosting, beat the butter until soft and pale then gradually beat in the sugar followed by the coffee.
Spread the top of one cake with a third of the frosting then place the second cake on top. Smooth the remaining frosting around the sides and top of the cake. Decorate with the reserved walnut halves.