Medallists Queally (left) and Hoy (right) celebrate with Australia's Ben Kersten

The 35-year-old Queally finished 0.034 seconds behind Australian Ben Kersten (1:01.815) to claim his third successive silver in the event.

Hoy, who was defending the title he won in Manchester in 2002, started quickly but faded to finish in 1:02.071.

Hoy's Scotland team-mate Craig Maclean was edged out of the medals (1:02.983).

Hoy told the BBC: "I had a good start but didn't have the legs and didn't quite hold on to the end.

"It's a strange one. I felt confident but to give Ben and Jason their dues, they have had really good rides.

"It's not the best but if you have to get beaten, it's better to get beaten by a friend."

Queally was disappointed not to finally land the gold medal but he said: "I tried my best and I couldn't have done any more.

"Congratulations to Ben, I'm pleased for him - it was a fantastic race."

Paul Manning led an English clean sweep of the medals in the men's 4km individual track pursuit.

An English 1-2-3 is fabulous. We have been riding very well and always knew it was possible Paul Manning

Manning, 21, clocked a time of four minutes 23.799 seconds in his head-to-head with Rob Hayles, who crossed in 4:28.616.

Hayles, who was looking to add gold to his world titles in the team sprint and madison, looked to be in control with two laps to go but he faded badly and had to settle for silver.

Team-mate Stephen Cummings recorded 4:24.767 to win the bronze in his third place showdown with New Zealand's Marc Ryan.

Manning and Hayles were overwhelmed to have claimed a clean sweep.

Manning said: "An English 1-2-3 is fabulous. We have been riding very well and always knew it was possible.

"As for getting England's first gold of the Games, it's a fabulous achievement.

Silver-medallist Hayles added: "I don't think it has been done before. This has been a great day for England."