Combine flour, instant yeast, and warm milk in the bowl of the stand mixer until dough forms. Knead for 2 minutes. The sponge will feel rather dry. Cover with plastic wrap and allow to sit at room temperature for 45 minutes until doubled in size.
PREPARE THE DOUGH:
While the sponge is resting, combine the dried fruits in a shallow bowl. Toss with rum. Set aside. Stir every 15 minutes while sponge is resting.
In a small bowl, whisk together milk, eggs, and yolk. Set aside.
In another bowl, stir together the sugar, lemon zest, and orange zest. Set aside.
Attach the dough hook to your stand mixer. In the same bowl with the sponge dough, add the flour, salt, yeast, milk mixture, sugar mixture, and honey. Mix together on low speed for 2 minutes. Scrape down the sides of the bowl. Add the dried fruit mixture. Mix for another 2 minutes on low speed.
Scrape down the sides of the bowl. Mix on medium speed for another 2 minutes. Decrease to low speed and add the butter, 1 tablespoon at a time, while the mixer is running. Once all the butter has been added, increase to medium speed and knead for 5 minutes until dough is smooth. Scrape down the sides of the bowl as needed to ensure thorough mixing.
Transfer the dough to a large, greased bowl (or large hotel pan). Cover with plastic wrap and allow to rest at room temperature for 75 minutes until the dough has puffed up.
Using greased hands gently deflate dough. Fold into thirds like a letter. Cover with plastic wrap and let rest for another 15 minutes.
Divide the dough into 2 equal pieces, roughly 1 pound 4 oz each. Working on a clean surface, shape into a ball using greased hands. Cover with plastic wrap and let rest 15 minutes.
PREPARE EGG WASH & GET READY TO BAKE:
Meanwhile, make the egg wash by whisking together egg, water, and salt. Keep covered and set aside.
Rework the dough's ball shape and place in two greased paper panettone molds. Lightly brush the top of the dough with egg wash. Loosely cover with plastic wrap. Let rest and proof for 1 hour 40 minutes until dough has risen about 2/3 up the mold.
Preheat oven to 365 degrees F. Uncover the risen dough. Lightly brush with egg wash again. Use a very sharp knife (or bread scoring blade) to score an "X" across the entire surface of the dough. Place 1/2 tablespoon of butter in the center of "X".
Bake in preheated oven for 35 to 40 minutes until the bread is golden brown and the internal temperature of the bread registers at least 185 degrees F on a kitchen thermometer. If the bread is browning too fast, cover with a foil tent.
Notes
Cooled panettone will keep for up to 5 days tightly wrapped at room temperature.
This recipe requires INSTANT YEAST. Do not substitute in Active Dry Yeast.
Dough will be very sticky. Do not add additional flour. Keep kneading dough in the mixer until smooth.