In a saucepan, bring the water and rice to a boil. Stir, cover, and simmer gently for about 15 minutes or until the water has been absorbed. Add the milk and bring to a boil. Simmer gently, uncovered, for about 30 minutes, stirring frequently until the rice is tender. Set aside.
In a bowl, combine the sugar and cornstarch. Add the egg and vanilla and combine with a whisk. Gradually pour in the rice pudding and cook for about 2 minutes over medium heat, stirring constantly, or until the rice thickens and becomes very sticky.
Spread the rice on a baking sheet and cover with plastic wrap. Refrigerate for about 2 hours or until completely chilled.
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