Preheat the oven to 170°C (325°F) gas 3.
Put the flour, sugar, baking powder, salt and butter in a freestanding electric mixer with a paddle attachment (or use a handheld electric whisk) and beat on slow speed until you get a sandy consistency and everything is combined. Gradually pour in half the milk and beat until the milk is just incorporated.
Whisk the egg, vanilla extract and remaining milk together in a separate bowl for a few seconds, then pour into the flour mixture and continue beating until just incorporated (scrape any unmixed ingredients from the side of the bowl with a rubber spatula). Continue mixing for a couple more minutes until the mixture is smooth. Do not overmix.
Spoon the mixture into the paper cases until two-thirds full and bake in the preheated oven for 20–25 minutes, or until light golden and the sponge bounces back when touched. A skewer inserted in the centre should come out clean.
Leave the cupcakes to cool slightly in the tray before turning out onto a wire cooling rack to cool completely.
Put the medium marshmallows in a heatproof bowl over a pan of simmering water. Leave until melted and smooth.
When the cupcakes are cold, hollow out a small section in the centre of each one and fill with a dollop of melted marshmallow. Leave to cool.
Stir the mini marshmallows into the vanilla frosting by hand until evenly dispersed.
Spoon the frosting on top of the cupcakes and decorate with edible glitter