In a large skillet, over medium heat, melt 1/4 cup of butter. Using a whisk, add ¼ cup of flour and whisk briskly to create a thick paste.
Slowly add in 2½ cups of milk, whisking continually, until thick and creamy. If the sauce is too thick, add in more milk until the creamy consistency of gravy and coats the back of a spoon.
Add in ½ tsp. of salt and ¼ tsp. coarse black pepper.
Spray a deep, 4 quart, baking dish, with cooking spray.
Place ⅓ of the sliced, drained potatoes in the bottom of the baking dish. Place ⅓ the ham slices or diced ham on top of the potatoes. Sprinkle ⅓ the can of drained peas over the ham.
Pour ⅓ of the white cream sauce over the top of the layers.
Repeat the layers again. ⅓ of the sliced potatoes, ⅓ of the ham, ⅓ of the can of peas. ⅓ of the cream sauce.
Top with the last layer of the remaining ⅓ of the potatoes, peas and cream sauce. Ending with cream sauce.
Sprinkle with Paprika. Cover with aluminum foil.
Bake in the preheated 350°F oven for one hour. Remove foil, and brown for 10-15 minutes.
Serve Immediately.