You can do the kneading by hand, but I always use my food processor when I can.
In a small bowl, add sugar and yeast to the milk and stir till dissolved. Keep aside for 5 to 10 minutes till frothy.
Put the butter, salt and 2 cups flour into the food processor bowl and pulse a couple of time to blend. Add the yeast mixture and process until a dough forms. Add more flour in spoonsful, if necessary, and process/ knead till you have a soft and elastic dough which is not sticky.
Shape the dough into a ball and place in an oiled bowl, turning the dough around to coat it well with the oil. Cover and let rise until doubled. This should take about an hour.
Lightly punch the dough down. Turn it onto a lightly floured working surface and divide into 2 equal portions. Cut one portion into 2 portions, a one third portion and a two thirds portion. Form each portion into a smooth ball. The smaller bit will form the head and the larger the body. half; shape into balls.
Cut the other half into 7 equal portions and shape them all into smooth round balls. Take a greased baking sheet and place the head and body in the centre joined together. Flatten them slightly. Arrange 2 of the 7 balls on top of the head to form ears. Using the end of a wooden dowel (or even your thumb) make depressions in the ears.
Place 1 ball of the remaining 5 balls on the lower part of the face to make the nose. Flatten slightly and smoothen the edges of the u201cnoseu201d onto the u201cfaceu201d so that it doesnu2019t separate during baking. Now arrange the remaining 4 balls to form the arms and legs of the teddy bear.
Cover the teddy bear with a cotton towel and allow it to rise for another hour till almost double. Brush the teddy bear with milk and place the chocolate buttons for eyes, nose, in the ear depressions and on the body. Use mini-chocolate chips on arms and legs to resemble claws.
Bake the teddy bear at 190C (375F) for 25-30 minutes or until golden brown. Carefully remove the bread from the pan and cool on wire racks.
Slice it and eat, if you can bring yourself to do so! This loaf cuts into about 12 slices.