How to stop oil separating from cheese I cooked something yesterday similar to a potato Gratin using a cheese sauce. I noticed afterwards that the oil from the cheese had separated and after serving it up, there was a pool of orangey oil sitting on the plate.

Is there a way to prevent this, either by using a certain type of cheese or some other way?

The cheese I used was a mature farmhouse cheddar.
I know you are worried about the flavor being bland, but have you tried mixing the aged, dry cheese with one that will melt better? The flavor of a good, mature cheese goes a long way, so I don't think you will notice a loss of flavor... Find a flavorful, relatively young, melty cheese, experiment with the proportions, and give it another try.