Preheat the oven to 170°C/Fan 150°C/Gas 3½. Trim any hard fat off the beef and cut the meat into rough 4cm chunks. Season well with salt and freshly ground black pepper.
Heat the oil in a large flameproof casserole dish. Add the beef chunks and fry over a high heat until nicely browned all over, turning regularly.
Reduce to a medium heat and tip the onions into the pan and cook with the beef for 5 mins until they start to brown. Add the crushed garlic and cook for a further minute, stirring regularly.
Sprinkle both paprikas and the flour over the meat and crumble the stock cube on top. Add the water, tomatoes, tomato puree and bay leaves. Season with salt and pepper, stir well and bring to a simmer. Cover with a tightly fitting lid and transfer the dish to the oven. Cook for 1½ hours.
While the beef is cooking, remove the core and seeds from each pepper and discard them. Cut each pepper into chunks of about 3cm. When the beef has cooked, carefully remove the dish from the oven.
Stir in the peppers, put the lid back on the casserole dish and put the goulash back in the oven for a further hour or until the beef is meltingly tender.
Serve with mashed potato and a spoonful of soured cream.