Beat the butter and sugar together, then add the milk and vanilla extract and mix the butter icing to a spreading consistency.
Cut the cake into a stocking shape about 11 cm (4½ inches) wide at the top of the leg. Cut 3 different-sized gifts from the trimmings. Split the cake horizontally and sandwich with butter icing. Spread butter icing very thinly over the top and sides of the cake and over the gifts. Transfer to a cake board or plate.
Reserve 50 g (2 oz) of the blue icing and knead the rest on a surface lightly dusted with icing sugar until slightly softened. Roll out and drape over the whole cake. Smooth in place and trim off the excess.
Spread the royal icing over the stocking top, then rough up the surface to resemble fleecy stocking lining.
Knead and roll out the white icing. Using biscuit cutters, cut out crescent moons and star shapes. Stick the shapes and silver balls on to the stocking with dots of writing icing.
Knead and roll out the pink and reserved blue icings and use to cover the gifts. Cut ribbons from the trimmings and stick on to the gifts with writing icing. Place at the stocking top. Add the candy canes to the cake board or plate, placing 1 cane at the stocking top.