To prepare the caramel, in a small,heavy saucepan,combine 1 cup sugar and a little water and place pan on low heat and stir until the sugar syrup turns golden brown.Remove pan from heat and pour it to a oven proof dish which you are going to bake the pudding.
Mix condensed milk, water and vanilla in a bowl.Then add the beaten eggs to the mixture and beat well. Strain the mixture to the baking dish with a strainer and cover with foil. Preheat the oven to 375 F. Now place the dish in a baking tray with a little water and bake it in the oven for a about 50 minutes or until well done.Let it cool to room temperature , cover the dish and leave in the refrigerator for several hours, preferably over night. Take out of the refrigerator 30 minutes before serving. Carefully invert on to a serving dish allowing the caramel to run down the sides.