This Italian bread is good cut into long slices or split open for sandwiches.
In an electric mixer, combine 1 cup water and yeast. Let stand until yeast is creamy, about 10 minutes. Add remaining water and sponge, and mix, using paddle attachment, on low speed until combined, about 2 minutes.
In a medium bowl, combine flour, powdered milk, and salt; add to yeast mixture, and mix on low speed for 1 minute. Change to dough hook, and mix on medium-low speed until dough is smooth and sticks to fingers slightly when squeezed, about 8 minutes. Or knead by hand, 15 to 20 minutes.
Transfer dough to a floured surface, and knead four or five turns into a ball. Place dough, smooth side up, in a lightly oiled bowl, and cover with plastic wrap; let rise in a warm place until dough has doubled in bulk and is slightly blistered and satiny, about 1 hour.
Punch dough down, and fold over onto itself four or five times. Turn folded side face down in the bowl. Cover, and let rise again in a warm place until doubled in bulk and satiny, about 50 minutes.
Turn dough onto a floured surface, flour the top, and cut into three pieces.
Line three baking sheets with parchment; flour generously. Transfer a piece of dough to each baking sheet. Gently pull each piece into a rough rectangle (about 7-by-11 inches). Cover loosely with oiled plastic wrap; let rise in a warm place until doubled in bulk and small air pockets appear, about 30 minutes.
Dimple the surface of the bread with your fingertips. Cover with plastic wrap, and let rise again for 30 minutes. Sprinkle with flour, and dimple again; cover, and let rise in a warm place for 30 minutes more. Thirty minutes before the rising is completed, place a baking stone, if using, in the lower third of the oven and a baking pan on the lowest shelf. Heat oven to 450 degrees.
Slide loaves, along with parchment, onto baking stone. If not using a stone, cook on the parchment-lined baking sheets. Quickly pour 2 cups very hot water into the baking pan to create steam, and close the oven door. Bake until bread is golden brown and hollow sounding when tapped on the bottom, 20 to 25 minutes. Cool on a wire rack for at least 30 minutes before slicing.