Preheat oven to 350 degrees F. Grease and flour a bundt pan.

Cream together butter and 1 1/4 cups of the granulated sugar. Stir in 1/4 cup milk and vanilla.

Sift together flour, salt, and baking powder. Stir in poppy seeds. Set aside.

Alternately add the flour mixture and the 3/4 cup milk, a little bit at a time, stirring gently after each addition, starting and ending with flour.

Beat the egg whites in a large bowl until they stand in soft peaks and then beat in remaining 1/2 cup sugar. Fold egg whites into cake batter.

Pour batter into greased bundt pan. Bake for 35-40 minutes or until a toothpick inserted in the center comes out clean. Allow to cool for a few minutes in the bundt pan before inverting on a wire rack.

Sift powdered sugar over the top of the cake before serving.