Preheat oven to 400°. Combine flour, granulated sugar, baking powder, salt and, if desired, cinnamon. Stir in milk just until combined; fold in peaches. Spread into a greased 8-in. square baking dish.

For topping, combine water, sugars, butter and nutmeg in a large saucepan. Bring to a boil, stirring until sugars are dissolved. Pour over peach mixture. Bake until filling is bubbly and a toothpick inserted in topping comes out clean, 40-50 minutes. Serve warm or cold with cream.