The nine-year-old was on course for a shot at the Grade One prize on December 28 having made a winning seasonal return in a Listed contest at Aintree earlier this month.
Those plans have now been shelved with the Lambourn handler deciding not to take his stable star over to Ireland over fears of encountering testing conditions.
Sherwood said: “There is nothing wrong with Many Clouds. If it was genuine decent ground we would have seriously thought about it but I don’t want to leave the season behind in one race and the possibility of heavy ground has changed my mind.
“His trach washes were not 100 per cent. They were 99.9 per cent but when you are taking on the Irish boys in their back garden you need to be 100 per cent. He is not the best of travellers but that is not a reason why you wouldn’t go.
“He will either go for the Peter Marsh at Haydock, Cotswold Chase at Cheltenham or Denman Chase at Newbury.
“He will probably take the same route as last season which is the Cotswold, then Kelso and then on to Aintree but you have got to have the other races as an insurance policy for the weather.
“The main aim is Aintree in April so we don’t want to bottom him out now.”
Don Poli’s career is to be put on the line in the race he won 12 months ago.
Since putting in an abysmal display in the JNwine.com Champion Chase at Down Royal, the Gordon Elliott-trained seven-year-old has had a spell hunting in a bid to revitalise him.
“I’d hope to see a different horse on winter ground. If we don’t, we don’t have a horse any more,” said Eddie O’Leary, racing manager for owners Gigginstown House Stud, in the Irish Independent.
“He has been hunting and doing this and that but we can draw a line through him if he does not show some spark in the Lexus.”
Gigginstown are responsible for eight of the 19 horses left in the Grade One prize at the confirmations stage.
Noel Meade’s Road To Riches also holds an entry in the 32Red King George VI Chase at Kempton on Boxing Day.
The others are Empire Of Dirt, Mozoltov, Outlander, Roi Des Francs, Valseur Lido and Wounded Warrior.
Willie Mullins has left in recent John Durkan Memorial Punchestown Chase scorer Djakadam and the mare Vroum Vroum Mag, who has alternative engagements in the Christmas Hurdles at both Leopardstown and Kempton.
The three British-trained possibles are Jonjo O’Neill’s pair of More Of That and Taquin Du Seuil and Irish Cavalier from the Rebecca Curtis stable.
Completing the list are Arctic Skipper, Fine Rightly, Gilgamboa, Lord Windermere, Smashing and Zabana.