Melt the butter and sugar in a heavy-bottomed pan, bring to a boil and boil for 2 minutes. Cool for 5 minutes.
Heat the evaporated milk to just below boiling point, then gradually stir into the sugar mixture, Cook over a low heat for 2 minutes, stirring frequently.
Spread the hazelnuts on a baking sheet and toast under a hot broiler.
Tip on to a clean dish towel and rub briskly to remove the skins.
Chop the nuts coarsely and stir into the sauce. Serve hot, poured over scoops of vanilla ice-cream and warm waffles or pancakes.