Cut onions into 1/4 inch slices and separate into rings.

Place onions in a bowl.

Add buttermilk and refrigerate for 15 minutes.

Heat the oil to 365-370.

In a small bowl, stir together the flour, baking powder, salt and cayenne.

Dip the onion slices into the flour mixture until they are all coated; set aside. Pour the buttermilk from the bowl into the flour mixture add the water, the egg and stir until blended using a fork.

Dip the floured rings into the batter to coat, then place on a wire rack to drain.

Spread the bread crumbs out on a plate or shallow dish. Dip the onion rings into the crumbs on both sides to coat.

Deep fry a few at a time for 2 to 3 minutes, or until golden brown (turning midway).

Place on paper towels to drain.

Salt to taste.