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Rinse shredded potatoes in cold water; drain well, squeezing to remove excess water. Place in a large bowl. Stir in egg, flour, onion, salt and pepper.
In a large nonstick skillet, heat ¼ in. oil over medium heat. Working in batches, drop potato mixture by ⅓ cupfuls into oil; press to flatten slightly. Fry both sides until golden brown; drain on paper towels. Serve immediately. If desired, sprinkle with parsley and top with applesauce and sour cream.