For the sauce: In a saucepan, combine the 1 1/2 cups
water, sugar, vinegar, reserved pineapple juice, and food coloring. Heat to boiling. Turn off heat. Combine 1/4 cup cornstarch and 1/4 cup water; slowly stir into saucepan. Continue stirring until mixture thickens.
For the batter: Combine flour, oil, cornstarch, salt, white pepper, and egg. Add the water gradually to make a thick batter. Stir to blend thoroughly.
Add chicken pieces to the batter, and stir until chicken is well coated.
Heat oil in skillet or wok to 360 degrees F. Fry chicken pieces about 5 minutes each side, or until golden. Remove chicken, and drain on paper towels.
When ready to serve, layer green peppers, pineapple chunks, and cooked chicken pieces on a platter. Pour hot sweet and sour sauce over top.