Butter two 8-by-2-inch round cake pans. Line with parchment paper, and butter again. Dust with flour, and tap out the excess set aside.
In a medium bowl, sift together cake flour, cocoa, and baking powder, set aside.
With an electric mixer combine the butter and sugar, and beat on medium speed until light and fluffy, about 15 mins.
Add eggs, one at a time, beating well after each addition.
Add vanilla, salt, food colouring, and water.
In a small bowl, stir together baking soda and vinegar; add to batter. Beat on medium speed for 10 seconds.
Divide batter between prepared pans, and bake until a cake tester inserted into the centre comes out clean, 25 to 30 minutes. Remove pans from oven, and transfer to a wire rack to cool, about 15 minutes. Turn cakes out onto rack, cool.
Beat cream cheese and butter in large bowl until smooth. Beat in vanilla. Add powdered sugar and beat until smooth.
Place 1 cake layer, flat side up, on platter. Spread 1 cup frosting over top of cake. Arrange 1 basket raspberries and 1/2 basket blueberries atop frosting, pressing lightly to adhere.
Top with second cake layer, flat side down. Spread remaining frosting over top and sides of cake. Arrange remaining berries decoratively over top of cake