Grease a medium sized non stick rectangular cake tin or line with baking paper.
Add the sugar, water, vanilla seeds, butter and the condensed milk to a large non stick pan and turn the heat on medium-high and bring to a boil.
Reduce the heat to medium low and continue to stir. I find using a whisk helps. As the mixture cooks it will start to darken in colour. You want a rich caramel colour and you want the mixture to begin to thicken. As the mixture starts to darken and thicken (around 20 minutes) take teaspoonfuls of the mixture and place onto a plate and leave it a for a few minutes. Use a knife and spread the mixture across the plate. What you want to see is grooves from the knife in the mixture. Also taste it, it should have a slight sugared texture. When it's at this point it's ready to remove from the heat. If the mixture is chewy, it's not there yet, and keep cooking.
When the mixture is ready pour it into the prepared cake tin. You will need to do this very quickly because as soon as you remove it from the heat it will start to set. Try to get as much of the mix out of the pot and into the pan by scraping the pot. Roll the pan from side to side to spread the mix evenly in the pan. Set aside to cool. Once the mixture is set cut into small squares.
If you have left the mixture to set for a few hours and it still hasn't set, then it needs further cooking. Don't worry though, you don't need to throw it out and start again, simply place the mixture back into a saucepan, let it melt, and continue cooking. If you notice flecks don't worry, reduce the heat and make sure you stir more. However, if you see black streaks, unfortunately it's burnt.