Preheat oven to 400 degrees and butter a 3-quart gratin or shallow baking dish. Bring a large saucepan of salted water to a boil. Peel potatoes and cut into thin slices (about 1/8-inch thick). Add potatoes to boiling water and parcook 4 minutes. Drain potatoes well in a colander.
In gratin or baking dish arrange potatoes, overlapping them, in 3 layers, sprinkling first 2 layers each with 1/2 cup Gruyere and salt and peppers to taste.
Heat milk, cream and nutmeg in a small bowl. Season mixture with salt and pepper and pour evenly over potatoes. Sprinkle potatoes with remaining 1/2 cup cheese and bake 30 minutes, or until top is golden and potatoes are tender