Cook the macaroni in salted water as directed on the package. While it's cooking, use a little of the butter to lightly grease a casserole dish. Melt the rest of the butter in a medium-size saucepan over low heat. Slowly add the flour, stirring all the time, and cook for about 3 minutes. Add a little milk and stir in to create a paste, then gradually whisk in the rest of the milk to thoroughly incorporate the flour mixture.
Peel and chop the onion, then stir in into the pan along with the paprika and the bay leaves. Simmer for 15 minutes, stirring frequently. Remove from heat and discard the bay leaves.
Meanwhile, crumble the Stilton and grate the Cheddar. Add the Stilton and about two-thirds of the Cheddar to the mix in the saucepan and season to taste with salt and freshly ground black pepper.
Drain the cooked macaroni and stir in the sauce. Pour half of macaroni mixture into the greased casserole dish and top with remaining Cheddar cheese. Pour in the remaining macaroni and sprinkle with the finely grated Parmesan cheese
Bake in a preheated moderate oven (Mk 4 - 350ºF - 180ºC) for 30 minutes. Allow to stand for about 5 to 10 minutes before serving.