In a bowl combine the butter, sugar, vanilla sugar and egg and beat with hand mixer or wooden spoon until creamy. Gradually sift in the flour and baking powder and mix slowly, bringing the mixture together into a crumbly ball. Knead into a smooth ball then place in the fridge for 1 hour to chill.
Preheat the oven to 180 C / Gas 4 and line a baking tray with baking parchment.
Turn out the dough onto a floured work surface and roll out thinly. Cut into 1cm wide strips and about 7cm long. Cut a tip into one end to resemble a crayon. Continue until the dough is used up. Arrange on the prepared baking tray.
Bake in the preheated oven for 10 minutes, or until the edges are lightly browned.
Remove the biscuits from the oven and allow to cool completely on a cooling rack.
For the decoration:
To decorate, place some icing sugar into a saucer and add just enough lemon juice to form a thick, but still runny consistency. Transfer the mixture into several saucers (depending on how many colours you would like to make) and add a drop or two of food colouring to each. Spread a little coloured glaze on each crayon biscuit, or decorate as desired.
Lay the biscuits on a cooling rack to allow the glaze to dry before serving.
Vanilla sugar is generally available in supermarkets nowadays, however, in a pinch substitute 1 teaspoon of vanilla extract to every 2 teaspoons vanilla sugar.