In a large saucepan, combine peaches, sugar and nutmeg. Cook over medium heat, stirring occasionally, until mixture thickens and begins to bubble and peaches are tender, 10 minutes. Remove from heat and stir in butter and vanilla until butter is melted. Pour into a 20x30cm baking dish.
In a medium bowl, combine flour and salt. Blend in margarine with pastry blender until mixture resembles pea-sized crumbs. Combine egg and cold water in a separate bowl and sprinkle mixture over pastry, a little at a time, stirring just until dough comes together. Roll out on a floured surface into a 20x30cm rectangle. Lay crust over peach mixture.
Bake in preheated oven 50 to 60 minutes, until crust is golden.