In a large bowl, combine the egg, 1/2 cup milk, Worcestershire sauce, shredded potatoes, onion, salt, nutmeg, ginger, allspice and pepper. Crumble beef over mixture and mix lightly but thoroughly. Shape into 48 balls.
In a large skillet over medium heat, cook meatballs in butter in batches until no longer pink; remove and keep warm.
Stir flour into drippings until blended; gradually add the remaining milk. Bring to a boil; cook and stir until thickened, about 2 minutes. Return meatballs to the pan; heat through. If desired, serve with mashed potatoes.