Mix water, 2/3 cup sugar, tapioca, cinnamon and nutmeg in large saucepan. Stir in apples. Bring to full boil on medium heat, stirring constantly.
Pour into 8-inch square baking dish.
Sprinkle with 1/2 cup of the cheese.
Mix flour, 2 Tbsp. sugar, baking powder and salt in large bowl.
Cut in butter until mixture resembles coarse crumbs. Stir in remaining 1/2 cup cheese and milk until mixture forms soft dough. Drop by 1/4 cupfuls onto hot apple mixture.
Bake 25 minutes or until biscuits are golden brown.