Melbourne Cup winner Dunaden has finished sixth in the King George VI and Queen Elizabeth Stakes won by Danedream at Ascot.
Dunaden's failure to win the race has opened the door for a possible return trip to Flemington in November should owner Sheikh Fahad now decide not to target the Prix de l'Arc de Triomphe.
With Craig Williams aboard, Dunaden took up the running 800 metres out but soon weakened as the challengers came.
Sheikh Fahad's racing manager David Redvers said the pace of the race had been unsuitable for Dunaden.
"If it could be run again we would love the KG run completely differently. Dunaden needs pace and cover and got neither," Redvers tweeted.
The winner of the 2011 Prix de l'Arc de Triomphe, Danedream caught Nathaniel right on the line.
The Peter Schiergen-trained Danedream was hardly an unknown quantity but the diminutive filly was required to prove herself again after a confusing recent performance in France.
Her rider Andrasch Starke described the last-ditch win as the finest moment of his career in what was a finish befitting of one of the strongest King George fields in years.
Nathaniel, out again just a fortnight after his gritty triumph in the Eclipse, has established himself as a near-impossible obstacle to pass once in front, and jockey William Buick must have thought a remarkable double had been secured passing the one-furlong (200m) marker.
Starke was over a length behind once Danedream was loosened for her challenge and, in the heat of the moment, used the whip more times than was permissible in order to capture Nathaniel.
In gaining an advantage of a nose at the post, the jockey received a six-day ban.
Joseph O'Brien, who seemed to have given St Nicholas Abbey a considerable amount to do after sitting at the back of the field, managed to muster enough momentum to finish a length and a half back in third, but was given a seven-day whip ban.
Buick was also handed two days (August 5-6) for the same offence.
"It was very tight, but I had a good feeling," Starke said.
"This was most definitely one of the best races in the last few years with so many class horses.
"She fought hard and it's definitely the biggest moment in my life."Schiergen said Danedream would once again be aimed at the Arc in October with the Japan Cup the following month her likely swan song.
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