Place bacon in a large, deep frying pan. Cook over medium high heat until evenly brown. Drain and set aside.
Put lamb, salt, pepper and flour in large mixing bowl. Toss to coat lamb evenly. Brown lamb in frying pan with bacon fat.
Place lamb into stock pot (leave 4 tablespoons of fat in frying pan). Add the garlic and onion and saute till onion begins to become golden. Deglaze frying pan with 120ml water and add the garlic-onion mixture to the stock pot with bacon, beef stock and sugar. Cover and simmer for 1 1/2 hours.
Add carrots, onions, potatoes, thyme, bay leaves and wine to pot. Reduce heat and simmer covered for 20 minutes until vegetables are tender.