1. To prepare the sponge: in a large bowl, whisk together the yeast, water, flour, honey or sugar and milk. Beat hard until smooth and creamy. Cover loosely with plastic wrap and let rest at room temperature for about 1 hour, or until bubbly.
2. Meanwhile, preheat the oven to 180 °C/135°F/Gas Mark 4. Chop the walnuts and spread them evenly on a baking sheet. Bake until lightly toasted, about 8 minutes. Allow to cool.
3. Add the oil, salt and 4oz / 125g of the flour to the sponge and stir with a wooden spoon to combine. Add the walnuts and the remaining flour 2oz / 60g at a time until a soft shaggy dough is formed that clears the sides of the bowl.
4. Turn the dough out onto a lightly floured work surface and gently knead until smooth and springy, about 3 minutes, adding 1tbsp of flour as necessary to prevent sticking. Push any walnuts that fall out back into the dough. This dough should be moist and soft, yet hold its own shape. Place in a greased deep container and turn once to coat the top. Cover with plastic wrap and let rise at room temperature until doubled in bulk, about 1 1/2 to 2 hours.
5. Gently turn the dough out onto the work surface and divide into 2 or 3 equal portions. Shape into round or standard loaves. Place on a greased or parchment lined baking sheet or in greased loaf pans. Cover loosely with plastic wrap and let stand at room temperature to rise until double, about 45 minutes. Twenty minutes before baking, preheat the oven to 190 °C/375°F/Gas Mark 5.
6. Bake on the centre rack of the preheated oven for about 35 to 40 minutes, or until brown and hollow sounding when tapped. Cool completely on a rack before slicing.