Melt the butter and olive oil in a frying pan.
Fry the chicken pieces, skin side down until golden brown. Turn and colour the other side then remove from frying pan and place in a flameproof Dutch oven with a lid.
Fry the bacon in the frying pan until browned and add to the pot with the chicken.
Fry the onions in the frying pan until lightly browned and add to the pot.
Add the garlic, thyme and bay leaves to the pot and season with salt and pepper.
Pour in the wine, bring to the boil and turn down the heat, put on the lid and let it simmer gently for 40 minutes.
Chop up the mushrooms and add them to the pot. Continue to simmer for a further 15 minutes.
Use a slotted spoon to remove the chicken, bacon, onions and mushrooms from the pot and keep them warm in a serving dish.
Mash together the butter and flour to form a paste.
Bring the wine left in the pot to the boil. Add the butter and flour paste and use a whisk to keep stirring while the mixture thickens. Once you have a nice thick sauce, pour it over the chicken.