Trim beef of any fat and cut into 3-4cm pieces. Cut pancetta into 5mm x 5mm thick matchsticks.
Preheat oven to 140°C.
Place the red wine into a saucepan and reduce by a third, about 8 minutes, then add the veal stock and bring up to the boil.
In a separate oven proof casserole dish, heat 1 tbsp olive oil and 1 tbsp butter. Season beef with sea salt and pan fry in batches until nice and golden in colour. Remove the beef from the pan and add 1 tbsp oil and 1 tbsp butter. When the butter is foaming, add onions and carrots. Slowly cook for about 8 minutes, then add garlic, cook for a further 4 minutes, then add the flour, mix through and gently cook for about 3 minutes.
Pour the hot red wine and stock mixture into the pan; do this gradually to ensure that no lumps form. Bring up to a gentle boil. Return beef pieces to the pan with any resting juices and the bay leaves. Cover with a lid and place into the oven and cook for 2 – 2½ hours, or until tender.
In a frying pan, heat the remaining oil and butter and add the pancetta and cook until lightly coloured, about 4 minutes, then remove from the pan. Add eschalots and colour then remove, finally add the button mushrooms and lightly sauté.
Add pancetta, eschalots, mushrooms and thyme leaves to the braised beef. Cook for a further 15 minutes. Serve with buttery mash, extra thyme and freshly ground pepper.