Place bacon in a large, deep frying pan. Cook over medium high heat until evenly brown. Saute chicken in bacon dripping, with salt and pepper, until browned. Reserve bacon for another use and set chicken aside.
To the pan add butter and melt; saute onion, garlic and mushrooms until onions are transparent. Stir in 250ml wine, brown sugar and vinegar. Cook, stirring, until hot and bubbly; add chicken and carrots.
Reduce heat to medium and cook 30 minutes, until chicken is well cooked and carrots are tender crisp.
Blend together 1 tablespoon wine and cornstarch. Stir into chicken and mix well to thicken.