In a 3-quart saucepan combine water, apples, blueberries, cranberries, and the 2/3 cup sugar. Bring to boiling; reduce heat. Cover and simmer for 5 minutes.
Meanwhile, for topping, combine flour, the 1/4 cup sugar, baking powder, cinnamon, nutmeg, and 1/4 teaspoon salt. Cut in margarine or butter until the mixture resembles coarse crumbs. Add milk to flour mixture, stirring just to moisten. Drop topping into 6 mounds atop hot filling. Cover and simmer about 15 minutes or until a toothpick inserted in the topping comes out clean. Serve warm; if desired, top with half-and-half or light cream. Makes 6 servings.