Nested File_Exists not working

I must be missing something obvious. Can someone tell me why this php code won't work!

if (file_exists("config.php"))

{

if (file_exists("cp.reg"))

{

header('Location: pads/default/');

}

else

{

header('Location: pads/noreg/');

}

}

else

{

header('Location: pads/startup/');

}

But if I take out the nested if it works fine. But I can't see any reference to the fact that you cannot nest file_exists statements? I realise I could rewrite to set a flag for one of the file exists but it seems less efficient.

TIA

Paul