The 'Almost Famous' actress - who is reportedly dating the 'Material Girl' singer's rumoured ex-boyfriend Alex 'A-Rod' Rodriguez - had been enjoying an afternoon at Veuve Clicquot's Manhattan Polo Classic on New York's Governors Island on Saturday afternoon (30.05.09) but when she heard Madonna was due to turn up, she vacated her seat and went to a nearby tent.
One guest said: "I didn't even see Kate Hudson again after Madonna arrived. She ran away! But if I were dating Madonna's ex, I'd be scared, too!"
Onlookers claim Madonna - who arrived with sons Rocco, eight, and three-year-old David and new boyfriend Jesus Luz - showed no signs of worrying about Kate.
One source told the New York Daily News newspaper: "Madonna literally didn't care. She showed up with no make-up, a dowdy denim outfit and her hair pulled up in a ponytail. She doesn't need to compete with Kate, because she will always be Queen Bee."
Last month, Kate was seen "making out" with New York Yankees baseball star Alex as they enjoyed an intimate date at New York's Mustang Grill restaurant.
An onlooker said: "Staff were asking patrons not to go in the back room around 1am because A-Rod and Kate Hudson were back there making out."
A waitress also confirmed the pair were at the eatery, celebrating Alex's team's win.
She said: "Yes, they were here together."
Other sources claim the smitten couple were spotted outside Alex's apartment block.