Sentimental Melbourne Cup favourite Red Cadeaux has been retired - but it could have been so much worse when the three-time cup runner-up broke down in the final stages of this year's race.

Red Cadeaux was rushed to a veterinary clinic at Werribee with trainer Ed Dunlop fearing he would never see the horse alive again.

Green screens were erected around the horse following the cup as vets assessed the damage, but a huge roar erupted from the crowd when Red Cadeaux walked into the horse ambulance.

Vets are optimistic the 10-year-old gelding's injury is not life threatening after stabilising a fracture in the horse's left fetlock.