In a small bowl, proof yeast by mixing together the yeast, warm water, and 1 Tablespoon of sugar. This takes about 3-5 minutes.
Meanwhile, in a mixing bowl, whisk together milk, butter or shortening, sugar and salt until well combined. You may use a bloom whisk or electric mixer.
Add the potato flakes and 2 cups flour and mix until paste-like consistency is achieved.
Add the rest of the flour, egg, and the bloomed yeast and mix using a spatula to form a dough. You might need to add more flour if the mixture is too liquid or too sticky but not too much.The dough is supposed to be sticky. Scrape the sides of the bowl while tipping the sticky dough over to a floured working surface. Knead for 7-10 minutes or until dough is smooth and elastic. Do the windowpane test.
Form the dough into a ball and place in a greased bowl. Cover the bowl with plastic wrap and let it rest and rise in a warm place for 40 minutes to an hour or until it doubled in size. I usually warm my oven at 50°C for 5 mins and turn it off then put the bowl of dough on the middle rack then close the door. This shortens the waiting time to 20-30 mins.
Prepare the cheese streusel. In a big bowl, using a spatula, cut the butter into the flour until small chunks are formed. Add the powdered sugar and powdered milk and mix until it gets crumbly. Add the grated cheese and mix until well distributed.
Take the dough from the oven and remove the cover. Line 2 baking sheets with parchment paper. Pinch a small piece from the dough about the size of a golf ball and roll it between your palms to form a ball.
Cover each dough ball generously with cheese streusel pressing it gently around so the topping would stick. Arrange the covered dough balls on the lined baking sheet. Leave some gaps in between as they will rise a bit again. Do not let them rise so much.
Bake them in a preheated oven at 300°F /150°C for 12 minutes or until they turn slightly golden. Turn off the oven but leave the cheese bread in the oven for another 5 minutes.
Best eaten while still warm.