Preheat the oven to 180°C (350°F), Gas Mark 4. Grease and flour the sides of two 18cm (7in) cake tins, and line the bases with discs of greaseproof paper.
Cream the butter until soft, then gradually add the sugar, and beat until light and fluffy. Add the eggs one by one, beating well all the time. Sieve the flour and baking powder, and stir in gently, then stir in the milk until just combined.
Divide the mixture between the two tins, hollowing it slightly in the centre, so that it will be flat on top when cooked. Bake for 20-25 minutes, or until the centre of the cake springs back when you push it gently. Turn out onto a wire rack and allow it to cool. (Place the cake that will become the top layer on its base so that the top isn't marked by the cooling rack.).
Meanwhile, place the sliced rhubarb, sugar and water in a saucepan, cover and cook over a gentle heat for about 10 minutes, until the rhubarb is soft. Take off the lid and boil while stirring until it is thick. Pour into a bowl and allow to cool. Whip the cream until it forms soft peaks, then fold in the rhubarb. Sandwich the cakes with the rhubarb cream and sprinkle with sieved icing or caster sugar.