Beef Stew with Mushrooms, Bacon and Red Wine

3 tbsp vegetable oil
Flour
2 1/2 lb boneless beef chuck, cut into 1 1/2 inch cubes
1 clove garlic, minced
2 cups dry red wine
3/4 cup beef stock
3 fresh parsley sprigs
1 bay leaf
2 slices bacon, chopped
1 cup onion, chopped coarse
1 tsp tomato paste
2 tbsp butter
1 lb mushrooms, quartered

Preheat oven to 325F. Heat 3 tbsp oil in heavy large Dutch oven over medium heat. Place flour in medium bowl; season with salt and pepper. Coat beef with flour, shaking off excess. Add half of beef to Dutch oven and brown well on all sides, about 5 minutes.
Transfer beef to plate. Repeat with remaining beef, adding more oil to pan as necessary. Return beef and any accumulated juices to Dutch oven. Reduce heat to medium. Add garlic and cook 1 minute. Add wine and enough beef stock to cover meat. Add parsley sprigs and bay leaf. Cover and bake about 2 hours.
Heat heavy small skillet over medium heat. Add bacon and saute until crisp. Transfer bacon to paper towels, using slotted spoon. Add onion to skillet and saute until translucent, about 5 minutes. Add tomato paste; stir 2 minutes. Add bacon and onion mixture to stew. Thin liquid with more stock if necessary. Cover and bake until meat is tender, about 30 minutes.
Melt butter in heavy large skillet over medium heat. Add mushrooms and saute until tender, about 10 minutes. Add mushrooms to stew. Season with salt and pepper. Ladle stew into bowls, sprinkle with chopped parsley.