Preheat oven to 190°C/375°F (gas 5).
Line a 12-hole muffin tin with paper cases.
To make the cupcakes, tip the flour and walnuts into the bowl of a food processor and process until the nuts are finely ground.
Beat the butter and sugar in a bowl until the mixture is light and fluffy, then add the eggs, and the flour and walnut mixture. Tip the coffee granules into a small bowl, add the water and stir until the coffee has dissolved, then add to the cake ingredients in the bowl. Beat the mixture until smooth.
Divide the mixture between the paper cases and bake in the centre of the oven for 15 to 20 minutes until the cakes have risen and are just firm to the touch in the centre. Remove the cakes from the oven and transfer them to a wire rack to cool.
To make the frosting, tip the coffee granules into a mixing bowl, add the boiling water and stir until the coffee has dissolved. Add the butter to the bowl and beat until smooth, then gradually beat in the confectioner's sugar. Spread the frosting over the top of the cupcakes and place a walnut half on top of each cupcake. Dust with a little confectioner's sugar before serving.