For the gnocchi: Boil the potatoes in their skins until cooked through and easily pierced with a knife. Let cool for a few minutes before peeling.
Mash the peeled potatoes in a large bowl. Add the flour, ricotta, egg and a generous pinch of salt and pepper, and mix until you have a smooth dough. (Add a little extra flour if the dough seems too wet, but try to avoid adding too much, as this will make the gnocchi heavy and dense. The dough needs to be just manageable.)
Divide the dough in half and roll into long sausage shapes, about 1/2-inch thick. Cut each length into 3/4-inch pieces. Gently make an indentation in each piece, using a fork dipped in flour (to prevent sticking).
For the pesto: Blitz the watercress, garlic, olive oil, Parmesan, almonds, lemon juice, lemon zest, sugar, and salt and pepper together in a food processor or with a stick blender. Adjust the seasoning to taste. Loosen with a little extra olive oil and hot water as needed.
Cook the gnocchi: Bring a large pot of water to a boil over high heat; add 1 tablespoon olive oil. In 2 or 3 batches, cook the gnocchi just until they rise to the surface, 1 to 2 minutes. With a slotted spoon, remove to large mixing bowl and drizzle with olive oil.
In a large skillet, fry the gnocchi in a little olive oil until golden on both sides, about 2 minutes per side.
Add the pesto to the gnocchi and toss gently. Serve immediately in warmed bowls with freshly grated Parmesan and a few watercress leaves.
This recipe is also delicious with crispy chorizo or bacon bits scattered over the top just before serving.