For the Doughnuts, combine warm milk, 125ml water, yeast and sugar in a mixing bowl. Stir to combine set aside for 10 minutes. Mix in flour, salt and oil until well combined. Cover and set aside in a warm place to prove for 30 minutes.
Heat deep fryer to 180C.
Meanwhile, for the Syrup, combine all ingredients in a large frypan and bring to the boil. Reduce heat and allow to gently simmer until reduced to a syrup consistency, about 3-4 minutes. Turn off heat.
To serve, transfer doughnut mixture to a piping bag fitted with a 2cm tip.
Pipe batter into hot oil, using scissors to cut batter to form golf ball sized doughnuts. Fry for 5 minutes until dark golden, turning to ensure even colour.
Toss doughnuts through syrup and place onto serving plate. Top with toasted walnuts and serve.