Drain clams, reserving liquid, and chop into small pieces. Set aside. In a large pot over medium heat, fry bacon until crisp. Drain and discard all but 2 tablespoons of bacon grease.

To the reserved bacon grease, add onion, salt, and pepper. Sauté until onions soften, about 5 minutes. Add flour and cook, stirring constantly for 2 minutes. Gradually whisk in water and reserved clam juice. Add potatoes and simmer covered for 10 to 15 minutes, or until tender.

Remove from heat and stir in milk, cream, chopped clams and parsley. Season, to taste, with more salt and pepper. Garnish with reserved cooked bacon and more fresh parsley.