Yeast: If your using dried yeast see step 2. For fresh yeast heat the milk gently in a small saucepan, until it reaches body temperature 37°C / 98°F. You should be able to comfortably put your finger in it and hold it there. (If it's too hot it will kill the yeast) Remove from the heat and stir in the yeast. Set aside until needed.
Bread dough: In a large mixing bowl or stand mixer fitted with a dough hook, add the flour, salt and sugar. If you are using dried yeast add the yeast to one side and the sugar and salt to the other.
Make a well in the centre and pour in the eggs and milk, then mix on a slow speed for 2–3 minutes, until combined.
Next, cut the butter into 1cm cubes and mix into the dough a few pieces at a time. Allow the butter to incorporate fully, before adding more.
Once you have added all the butter, continue through the sticky stage, until the dough is completely smooth, silky and elastic and pulls away from the sides of the bowl. Cover with plastic wrap and let the dough rest for about 15 minutes.
Grease a 900 g loaf tin with a little butter or neutral oil and line the bottom of the pan with parchment paper, to help release it after baking. Set aside while you shape the dough.
Shaping: Lightly flour a work surface and roll out the dough to form a 35x28 cm rectangle, with a long side closest to you. (See shaping post section)
Using an offset spatula, spread the homemade Nutella spread over the rectangle, leaving a ½ inch/1 cm border all around. Break up the chocolate and hazelnuts into small pieces and sprinkle on top the Nutella.
Starting from the long side closest to you, roll up the dough into a tight spiral like a roulade, with the seam underneath.
Turn the roll through 90° clockwise so that a short end is closest to you and using a large sharp knife, slice lengthways down through the middle of the dough, cutting it into 2 long even pieces.
With the cut-sides facing upwards, gently press the top end of each half together to seal, then lift the right half over the left half, followed by the left half over the right half. Repeat, twisting the dough to make two intertwined halves that form a stranded plait. Gently press the bottom ends together to seal.
Carefully lift the loaf into the lined tin, don’t worry if there are gaps in the tin as the babka will rise and look good.
Proving: Cover with a clean tea towel. Leave at room temperature for about 1-1½ hours until doubled in size. (In extremely warm weather it can take 45 minutes.)
Fifteen minutes before the end of the proving time, preheat the oven to 200°C / 180°C fan 400°F / Gas Mark 6.
Baking: bake the babka for 10 minutes, then reduce the oven temperature to 170°C / 150°C fan / 325°F/ Gas 3 and cook for a further 25–30 minutes, until a skewer inserted into the centre comes out clean.
Glaze: While the babka is baking, make the syrup. In a small saucepan over medium heat, bring water and sugar to a boil. As soon as the sugar dissolves, reduce the heat and simmer, without stirring, for 5 minutes, until syrupy.
Once the babka is ready and is out of the oven, brush the syrup over the hot babka.
Let the babka cool in the tin until warm enough to handle. Turn out onto a wire rack and serve warm or at room temperature.