Melt the butter in a large pan and fry the bacon until golden-brown. Remove from the pan and set aside. Peel and chop the onion and add to the pan (in the bacon fat), frying gently until the onion is soft and translucent. Meanwhile, peel the potatoes and cut them into small pieces about 1" (2.5cm) across. Rinse them under cold running water to remove any excess starch.
Pour the stock into the pan with the onions, then add the potatoes, salt and white pepper and the bay leaf. Turn the heat up and bring the stock to a gentle simmer, skimming off any scum that forms on the surface. Add the bacon then turn down the heat and cover the pan with a lid. Simmer for 25-30 minutes, or until the potatoes begin to break up.
Remove the bay leaf and bacon and pass the remaining mixture into a clean pan through a vegetable mill using the finest mesh disk. If you don't have a vegetable mill, use a fine sieve (strainer) and push the potatoes through the mesh with a wooden spoon. However, I don't recommend you use a food processor since the resulting soup is too smooth.
Gently reheat the soup and ladle into hot bowls. Serve with a good dose of soured cream and sprinkle with plenty of chopped chives.