Heat oven to 325°F. In large bowl, combine beef and 2 tablespoons flour; toss to coat evenly. In Dutch oven, heat oil over medium-high heat. Add beef; cook and stir until browned. Add all remaining ingredients except water and 1/4 cup flour; mix well. Cover.
Bake 1 hour 15 minutes to 1 hour 30 minutes or until beef is fork-tender. Meanwhile, in small bowl, beat water and 1/4 cup flour with whisk until smooth.
Remove stew from oven. Stir flour mixture; gradually add to stew, stirring gently to blend. Cover.
Return to oven; bake 30 minutes longer or until sauce has thickened.