In a large bowl, combine candy and water. Cover and refrigerate overnight; drain well and set aside.
In a large bowl, cream butter and brown sugar until light and fluffy. Add eggs, one at a time, beating well after each. Beat in vanilla. Combine the flour, baking powder and salt; gradually add to creamed mixture. Fold in walnuts and candy.
Spread into a greased 15x10x1-in. baking pan. Bake at 350° for 25-30 minutes or until golden brown. Cool on a wire rack. Dust with confectioners' sugar. Cut into bars.