Preheat the oven to 220°C, fan 200°C, gas 7. Sift the flour and baking powder into a large bowl. Add the salt, then rub in the butter with your fingertips (or combine in a food processor). Create a well in the middle of the mixture and stir in the egg, milk, mustard, 50g of the Cheddar and three quarters of the watercress. Bring the dough together with your hands and shape into a ball.
On a floured surface, roll out the dough to a 1.5cm thickness. Cut 12 rounds with a 6-7cm fluted cutter (or small glass), gently re-rolling and using the trimmings. Place on a floured baking tray, leaving space between each. Scatter with the remaining Cheddar and bake for 10-15 minutes, until golden.
Cool the scones on a wire rack. To serve, top with the soft cheese and smoked salmon and garnish with the remaining watercress.