Combine flour, salt, pepper and garlic granules in a bowl, and set aside. Heat the oil in a large frying pan over medium heat. Coat each piece of rabbit with the seasoned flour mixture, and cook in the hot oil for 3 to 5 minutes per side, until the rabbit pieces are golden brown. Remove the rabbit from the pan and set aside.
Preheat an oven to 170 C / Gas 3.
Mix together the mushroom soup, mushrooms, garlic, Italian herbs and water in a saucepan; bring to the boil over medium heat.
Place the browned rabbit pieces in a large roasting tin or casserole dish with a lid, and cover the rabbit with the carrots and potatoes. Pour the mushroom sauce over the rabbit, carrots and potatoes, then cover and bake in the preheated oven for 1 1/2 hours, until the rabbit and vegetables are tender and the sauce is bubbling.