Heat oil and add onion, garlic and capsicum. Cook stirring until softened. Add mushrooms, crushed tomatoes, sugar, tomatoe paste, water and stock. Bring to the boil, simmer uncovered for 30 minutes.
Beat cream cheese and cottage cheese with electric mixer until smooth.
Place a layer of tomatoe mixture in the bottom of greased lasgane dish and cover with spinnach leaves. Cover with 1/3 of cheese mixture. Then lasagne sheet. Continue until all mixture used ending with tomatoe sauce. Bake covered in foil in a moderate oven for 1 hour. Take out of the oven and cover with grated cheese and bake for a further 10-15 minutes uncovered. Cut into wedges to serve with a salad or wam crusty bread.