Chop bacon and in a large heavy saucepan, cook over moderate heat, stirring occasionally until crisp. Transfer bacon with a slotted spoon to paper towels to drain, reserving fat in pan. While bacon is cooking, chop onion. Peel potatoes & cut into 1/2" cubes. Cook onion in reserved fat over moderate heat, stirring occasionally, until softened.

In a measuring cup, stir together flour and water; add to onion with potatoes & broth. Simmer mixture 5 minutes, or until potatoes are just tender. Add wine & simmer l minute. Reduce heat to low; gradually stir in Cheddar (do not let boil). Divide soup among 4 bowls; sprinkle with bacon and chives. Makes about 5 cups.