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Trainer John Gosden was brimming with pride after Nathaniel agonisingly relinquished his crown in the King George VI and Queen Elizabeth Stakes at Ascot.
The four-year-old ran out an impressive winner of the Betfair-sponsored Group One a year ago and looked to have every chance of repeating the dose following a victorious seasonal return in the Coral-Eclipse at Sandown.
With just a fortnight between the two races, Nathaniel could have been forgiven for showing a degree of fatigue, but he produced an effort full of heart to go down by just a nose to the German filly Danedream.
Gosden said: "I'm delighted with him. I didn't know which horse had won crossing the line, and I was on the line.
"The winner has come back to her best. Anyone who was lucky enough to see her win the Arc last year, breaking the track record and destroying the colts, would know she is marvellous. She didn't handle the ground at Saint-Cloud the other day and she's come here and run a blinder.
"Our horse has run his race quite brilliantly - I'm beyond thrilled. I can't believe in two weeks he can run two races like that back to back. It's quite impressive. I think I'll suggest Danedream goes to the breeding shed! I'd love to come back here for the Champion Stakes and there is also the Arc as an option."
A length and a half further away in third was Coronation Cup winner St Nicholas Abbey, who came from a long way back to pick up minor honours under Joseph O'Brien.
Trainer Aidan O'Brien feels exaggerated waiting tactics must be employed on the talented five-year-old and also felt the rain-softened ground had blunted his raw speed.
He said: "He ran a great race. He has to be held up like that and we were just worried about the dead ground as he can't quicken like he normally does. There'll be other races for him."
Nathaniel's jockey William Buick was suspended for two days (August 5-6) for using his whip above the permitted level, while O'Brien jnr incurred a seven-day ban (August 4-10) and a £900 fine for his use of the whip. He will be on the sidelines from the last day of Glorious Goodwood on August 4.