For sauce, combine pineapple juice, sugar and cornstarch in a small saucepan. Add vinegar, ketchup and pineapple tidbits. Cook and stir until mixture comes to a boil and is thickened. Keep warm while fish is cooking.
In a mixing bowl, combine water, egg, salt, and vegetable oil. Beat slowly to blend. Gradually add flour, beating to form a smooth batter. Add food coloring if desired.
Dip fish fillets into batter and fry in hot oil until golden brown (5 to 6 minutes).
Remove and drain on absorbent towels. Serve with pineapple sauce.