Whitaker withdrew Peppermill from the first round of the team competition on Sunday, as the horse appeared unwell. But he was given a clean bill of health on Monday, and the British team's request that Whitaker be allowed to compete in the second team round was approved by the Ground Jury.
The other teams in the competition were then informed of the decision, which led to seven of the nine competing teams lodging a protest with the Ground Jury.
The case went before the Jumping Appeal Committee at 4pm yesterday, and the protest was upheld.
The Appeal Committee cited Article 264.4 of the FEI Rules for Jumping Events (Nations Cup), which state that "(4.1) A full Nations Cup team comprises four competitors each riding the same horse throughout the competition. All members of each team must take part in the first round, except as stated in 4.2: If a team, comprising four competitors, cannot improve its placing in the first or second round after its third competitor has completed his course, the fourth competitor may be withdrawn."
Britain started in fourth position but ended in seventh place.
British team members Tim Stockdale and Nick Skelton were disappointed at the result. Skelton told Sporting Life: "It is all about sportsmanship at the Olympic Games. We are not cheating and it is ridiculous."
Stockdale agreed, adding that Whitaker could have walked Peppermill up to a jump in the previous day's team contest and been eliminated, but he would then have been able to jump the next day. He told Sporting Life: "It is unsporting and is not in the concept of the Olympics. In respect of what John (Whitaker) has done for showjumping it is disappointing. Some people should hang their head in shame. It is disappointing."