Place potatoes in a Dutch oven and cover with water. Bring to a boil. Add leeks; return to a boil. Cover and cook for 5 minutes. Drain and pat dry. Place in a greased 13-in. x 9-in. baking dish.
In a large saucepan, melt butter. Stir in the flour, salt and pepper until smooth; gradually add milk. Bring to a boil; cook and stir for 2 minutes or until thickened. Stir in cheese and nutmeg until cheese is melted. Pour over potato mixture. Toss bread crumbs and butter; sprinkle over the top.
Cover and bake at 325° for 40 minutes. Uncover; sprinkle with cheddar cheese. Bake 15-20 minutes longer or until potatoes are tender.