Preheat the oven to 230C/450F/Gas 8.
For the grouse, lay the halved bacon slices over the grouse breasts and secure them with string. Season, to taste, with salt and freshly ground black pepper.
Heat the oil in an ovenproof frying pan over a high heat, add the bacon-wrapped grouse, bacon-side down, and fry for 1-2 minutes, then turn and fry on the other side for 1-2 minutes, or until the grouse is golden-brown on all sides.
Transfer the grouse to the oven for 10-12 minutes (for medium rare) or until cooked to your liking. Remove the grouse from the pan and set aside on a warm plate to rest. Reserve the pan and any juices.
Heat the reserved pan that the grouse was cooked in over a medium heat, add the red wine, thyme and bay leaf to the pan juices. Stir well, scraping the browned bits off the bottom of the pan with a wooden spoon.
Add the hot stock and bring to the boil, then reduce the heat to a simmer and simmer for 2-3 minutes, or until the volume of liquid has reduced by half. Season, to taste, with salt and freshly ground black pepper.
Strain the sauce through a fine sieve, catching the sieved liquid in a saucepan.
For the pâté, heat two tablespoons of the butter in a separate frying pan over a medium heat. When the butter is foaming, add the reserved grouse livers and hearts and the chicken livers and fry for 1-2 minutes, or until golden-brown on all sides but still pink inside.
Strain the pan contents through a colander, reserving the cooked hearts and livers.
Return the frying pan to the heat, add another tablespoon of the butter and, when foaming, add the shallots and garlic. Fry for 1-2 minutes, or until softened.
Add the brandy, port and Madeira and carefully set alight with a match. Allow the flames to flare up and die down, ensuring that you keep the pan well away from your face, body and any surrounding objects and that the extractor fan is switched off. Return the cooked livers and hearts to the pan.
Add the parsley, tarragon and remaining cooking juices from the livers to the pan and cook for 2-3 minutes, or until heated through. Season, to taste, with salt and freshly ground black pepper.
Transfer the mixture to a food processor and blend to a purée.
Heat the remaining butter in a separate frying pan over a medium heat, add the bread slices and fry for 1-2 minutes on each side, or until golden-brown on both sides. Set aside to drain on kitchen paper.
For the bread sauce, stud the onion with the clove and bay leaf, then place it into a pan and pour over the milk. Bring to a simmer and continue to simmer for 3-4 minutes.
Strain the mixture through a fine sieve into a clean pan, reserving the liquid.
Add the breadcrumbs to the strained milk, season, to taste, with salt and freshly ground black pepper, then add the nutmeg. Heat the mixture over a medium heat, stirring occasionally, for 3-4 minutes, or until thickened.
Add the butter and whisk until melted.
To serve, spread the pâté over the heart-shaped croutons and place one onto each of four serving plates. Remove the string from the grouse and stuff some of the watercress into the cavity of each. Place one grouse on top of each crouton. Serve the bread sauce in a separate side dish.
