3 cups sugar
1 tbsp all-purpose flour
1 cup milk
3/4 cup butter or margarine
1 teaspoon vanilla extract
Sprinkle 1/3 cup sugar in a shallow, heavy 3-1/2 quart Dutch oven; place over medium heat. Cook, stirring constantly, until sugar melts (sugar will clump) and syrup is light golden brown. Remove from heat. Combine remaining 2-1/2 cups sugar and flour in a large saucepan, stirring well; add milk and bring to a boil, stirring constantly. Gradually pour one-fourth of hot mixture into caramelized sugar, stirring constantly; add remaining hot mixture (mixture will lump, but continue stirring until smooth).
Return to heat. Cover and cook over low heat 2 minutes. Uncover and cook, without stirring, over medium heat until a candy thermometer registers 238º. Add butter, stirring to blend. Remove from heat and cool, without stirring until temperature drops to 110º (about 1 hr.). Add vanilla and beat mixture with a wooden spoon or at medium speed of an electric mixer until frosting reaches spreading consistency.
Tip: If frosting becomes too hard before spreading on cake, add a little warm water.