Racing: Kauto Star is set to return to routine work on Wednesday as he recovers from a minor foot infection.
Last year's totesport Cheltenham Gold Cup hero was the subject of an injury scare after winning the Commercial First Ascot Chase on Saturday.
However, Nicholls subsequently isolated an infection in the eight-year-old's off-hind foot and, with the problem clearing up nicely, Kauto Star is set to return to the fray.
Nicholls said: "He's fine. I took him out for a pick of grass last night and he was virtually sound. The problem seems to be well over and we're hoping he'll walk for a couple of days and canter on Wednesday morning, which is what he'd have been doing normally without the injury.
"We have lots of nice horses to run (at Cheltenham) and you obviously don't want the hiccups that we had on Saturday evening. We just have to try and eliminate those and make sure everything goes right up until the days that they run."
Nicholls also reports Kauto Star's stablemate and Gold Cup market rival Denman in grand shape as his Festival preparations step up a gear.
"He's fine and he had a quiet week after he won at Newbury," Nicholls added. "He starts back into full work this morning and he's in fine shape."
The Ditcheat handler admits he has a certain loyalty to Kauto Star after his heroics last term, but insists the duo are trained from an entirely level playing field.
"They're both obviously good horses. It's going to be a very interesting race and hopefully very good for racing," he continued. "There is a bit of a balance towards Kauto, just from the fact that he's the reigning champ.
"But both horses are from a professional team, will turn up there on the day in the best of health, and both will run 100 per cent on their merits."