Heat a large, heavy-bottomed pan over medium-high heat. Brown lamb in butter. Add water, salt, pepper, and thyme. Cover, reduce heat and simmer for 30 minutes. Skim off any fat then add potatoes and onions. Simmer covered for 20 minutes, or until the lamb and vegetables are tender.
In a small bowl whisk together cream and flour until smooth. Pour into stew and simmer for 10 minutes, stirring frequently, until mixture thickens. Serve hot.