Add water, butter, sugar and salt to a large saucepan, and bring to a boil over medium-high heat.
Add flour, reduce heat to medium-low and stir constantly with a wooden spoon until mixture comes together and is smooth.
Transfer mixture to a large mixing bowl; leave to cool for 5 minutes.
Add vanilla essence and egg to flour mixture then blend immediately with an electric mixer.
Blend until mixture comes together and is smooth (it will separate at first but continue mixing until it comes together).
Roll mixture into 1 cm x 5 cm lengths.
Fry about 2 minutes per side until golden brown.
Transfer to cinnamon sugar mixture and roll to coat.
Repeat process with remaining dough.
Churros are best served warm.