The Queen may have to forfeit prizemoney worth nearly NZ$160,000 after her horse Estimate failed a drugs test for prohibited substance and opioid morphine.
She learned of the test result while her family was celebrating baby Prince George's first birthday.
Estimate won the Gold Cup at last year's prestigious Royal Ascot meeting and came second in the race this year, winning £80,000 (NZ$158,000).
The Times has reported that Estimate faced "inevitable disqualification" from the second placing. The respected newspaper emphasised "there is no suggestion of foul play".
A statement by John Warren, the Queen's bloodstock and racing advisor, said the British Horseracing Authority (BHA) told the Palace five horses from various trainers tested positive for morphine.
"I can confirm that one of those horses was Estimate, the five year-old filly trained by Sir Michael Stoute and owned by the Queen," Warren said.
"Initial indications are that the positive test resulted from the consumption of a contaminated feed product.
"Sir Michael is working closely with the feed company involved to discover how the product may have become contaminated prior to delivery to his stables.''
"As the BHA investigates this matter, including potential links between the different cases, Sir Michael continues to offer his full co-operation. Dodson & Horrell, a feed merchant widely used by trainers, has already confirmed that one of its products could be at fault.
Sir Michael, one of six trainers of flat racing horses for the Queen, planned to run Estimate in the Goodwood Cup in Sussex next Friday and the BHA would place no obstacles in his way.
"There is no stand-down period for the horses involved," Mounsey confirmed to The Times.
It's not the first case of problems in the royal stable, but The Times suggested the development would be "an irritation for Sir Michael and Estimate's owner, rather than the embarrassment that ensued five years ago when a lesser light in the royal string, Moonlit Path, was found to have been administered with the anti-bleeding drug, tranexamic acid".