In small bowl, sprinkle yeast over water. Stir in sugar and set aside until mixture is foamy-about 10 min.
In medium size bowl, combine flour, baking powder and salt. With pastry blender or 2 knifes, cut in butter till mixture resembles coarse crumbs. Add yeast mixture and milk, mix lightly with fork until well combined.
Cover dough with clean cloth and let it rise in a warm place, until double in size-30 minutes.
Grease large baking dish. On lightly floured surface, roll out dough to 1/2 inch thickness. With 3 inch round cutter, cut out 12 biscuits. Place on greased baking dish. Pierce biscuits lightly a few times with fork.