Mix all the sauce ingredients together. Set aside.
Lay the fish and bay leaves in a frying pan. Pour over the milk and 150ml water. Cover, bring to a boil, then lower the heat and simmer for 4 minutes. Take off the heat and let stand, covered, for 10 minutes to gently finish cooking the fish.
Meanwhile, peel and chop the potatoes into even-sized chunks. Put them in a saucepan and just cover with boiling water. Add a pinch of salt, bring it back to the boil and simmer for 10 minutes or until tender, but not broken up.
Lift the fish out of the milk with a slotted spoon and put on a plate to cool.
Drain the potatoes in a colander and leave for a minute or two. Tip them back into the hot pan on the lowest heat you can and let them dry out for 1 minute, mashing them with a fork and stirring so they don't stick. You should have a light, dry fluffy mash.
Take off the heat and beat in 2 tablespoons of the sauce, then the lemon zest, parsley and chives. Season well with salt and pepper. The potato should have a good flavour, so taste and adjust to suit.
Drain off liquid from the fish, grind some pepper over it, then flake it into big chunks into the pan of potatoes. Using your hands, gently lift the fish and potatoes together so they just mix. You'll only need a couple of turns, or the fish will break up too much. Put to one side and cool.
Beat the egg on a large plate, add flour into a bowl and spread the breadcrumbs on a baking sheet. Divide the fish cake mixture into eight. With floured hands, carefully shape into eight cakes then cover each in flour, dip in egg and finally crumb. The entire fish cake should be covered in crumbs. Transfer to a plate, cover and chill for 30 minutes.
Heat the oil in a large frying pan. Fry each fish cakes over a medium heat for about 5 minutes on each side or until crisp and golden. Serve with the rest of the sauce and lemon wedges.