To start making the dough, combine the sugar, water and yeast in a small jug. Stand covered in a warm place for 10 minutes.
Sift flour into a large bowl, mix in the salt. Add the yeast mixture, milk and butter then combine to form a dough.
Turn onto a lightly floured surface and knead the dough until smooth and elastic (10-15 minutes). Cover and set in a warm place for 1 hour to rise.
While the dough is rising, combine the basil, pine nuts, parmesan, olive oil and garlic in a food processor and blitz to make the pesto.
Grease a deep 10×20cm baking tray. Turn the dough out onto a lightly floured surface and knead again until smooth.
Roll the dough out into a rectangle shape roughly 15×25cm.Spread the pesto over the rectangular dough then toss over the mozzarella so it forms a relatively even covering.
Roll the dough, starting on the long side into a swiss roll shape. Lightly flour a knife and slice the roll into 10-12 even sized pieces.
Gently shape pieces into balls and arrange in the base of the pan to form two layers, leaving some gap around the outside. Cover and rest for 30 minutes in a warm place.
Preheat oven to 180°C (fan-forced) or 200°C (conventional). Bake for 30 minutes or until golden. Allow to cool on a wire rack before serving.