Spray a non-stick flameproof casserole dish with cooking spray. Add the beef and cook over a medium heat for about 5 minutes or until browned. Using a slotted spoon, transfer the beef to a plate and set aside.
Add the bacon, onions, carrots and garlic to the dish. Sprinkle with sugar and cook for 7 minutes or until the onions are golden brown. Add the mushrooms and cook for about 4 minutes or until tender.
Return the beef (and any accumulated juices) to the dish. Sprinkle with flour and cook, stirring, until the flour has been absorbed; about 3 minutes.
Add the wine or stock to the dish and bring to the boil. Add the water, thyme and pepper to the dish then return to the boil. Cover and transfer to oven then bake for about 1 hour or until the meat is tender.
I made this in the slow cooker - for the sake of time and simplicity, I literally just put all the ingredients in the cooker pot, gave it a stir and left it on low for 7 hours. I omitted a 1/4 cup of the water, increased the meat to 500g, and used regular diced onion - and used the flour at the end to thicken. Really nice mellow flavour and the whole family enjoyed it! - 23 Feb 2012