In a large saucepan, combine butter, onions and sugar; sauté 20 to 25 minutes or until onions are golden. Stir in flour; continue to cook for 3 to 5 minutes. Add water and simmer, partially covered, for 30 minutes. Add salt and pepper, blending well.
Fill 4 oven-proof bowls with soup; top each with a bread slice and sprinkle generously with Parmesan cheese. Bake at 400° until cheese melts.