Preheat the oven to 325 degrees. Grease and flour a 9-inch by 5-inch by 3-inch loaf pan.
Separate the eggs, putting the whites into a large bowl. Sift the flour with the baking powder; set aside. In a large bowl, cream the butter and vanilla until light. Gradually add ½ cup of the sugar, beating until very light and fluffy. Then, add the egg yolks, one at a time, beating well after each addition. At low speed, beat the flour mixture into the butter mixture only until well combined. Stir in the walnuts. Beat the egg whites until soft peaks form. Add the remaining sugar, 2 tablespoons at a time, beating until stiff peaks form. With a wire whisk or rubber spatula, gently fold the egg whites into the batter just until combined. Pour the batter into the prepared pan and bake about 1 hour and 10 minutes or until a cake tester comes out clean. Cool in the pan on a wire rack for 15 minutes. Then turn out onto wire rack and cool completely. Slice thinly to serve.