In a large bowl, cream the butter, cream cheese and sugar until light and fluffy. Beat in egg and vanilla. Combine the flour, pudding mix and baking powder; gradually add to creamed mixture and mix well. Stir in chocolate chips. Refrigerate for 1 hour or until easy to handle.

Roll dough into 1-inch balls. Place 2 inches apart on greased baking sheets; flatten slightly with the bottom of a glass.

Bake at 350° for 10-12 minutes or until bottoms are lightly browned. Remove to wire racks.