METHOD
1. Preheat oven to 180°C fan forced.
2. Pat beef dry and season salt and pepper.
3. In a large heavy pot, heat 1 tablespoon olive oil over medium-high heat until hot and shimmering. Brown meat in batches, turning with tongs, about 5-8 minutes per batch, adding one tablespoon more oil as required. Do not overcrowd the pan and let meat develop brown crust before turning with tongs.) Transfer meat to a large plate and set aside.
4. Add onions, garlic and balsamic vinegar. Cook, stirring with a wooden spoon to scrape brown bits from bottom of pan, about 5 minutes.
5. Add tomato paste and cook a few minutes more.
6. Add beef with juices back to pan and sprinkle with flour; stir with wooden spoon until flour is dissolved, 1-2 minutes.
7. Add wine, beef broth, water, bay leaf, thyme, and sugar; stir with wooden spoon to loosen any brown bits from bottom of pan and bring to a boil. Cover pot with lid, transfer to preheated oven and braise for 2 hours.
8. Remove pot from oven and add carrots and potatoes. Cover and place back in oven for 50-60 minutes more, or until vegetables are cooked and meat is very tender.
Note: This stew improves in flavour if made at least 1 day ahead. Reheat, covered, over medium heat.