Second at his only previous outing behind Golden Slipper favourite She Will Reign in the $500,000 Inglis Nursery in December, Diamond Tathagata produced a determined effort for Glyn Schofield in heavy conditions to score a narrow win.
Always up on the pace, Diamond Tathagata (images Steve Hart) dug deep to outpoint the Godolphin runner Coruscate and snatch a long head win in the 1200 metre sprint.
Newnham set up stables at Warwick Farm last year after riding and working for Waterhouse for the best part of his career.
"It's an unbelievable feeling," Newnham said.
"It's just great that in my first year of training I've got a Golden Slipper runner and my first Group winner.
"Hopefully it stands me in good stead to take up the boxes at Randwick that are being vacated by Michael Freedman."
Newnham has had much to do with past Waterhouse trained Slipper winners and compared Diamond Tathagata to Pierro.
"He's a very laidback horse," he said. "If you had a look at him parade, he paraded like an older horse.
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"He's got a similar nature to Pierro in that he's very relaxed.
"I'm not saying he's at that level of ability but he's got a similar nature and he's got a very similar work ethic.
"He doesn't expose himself too much, you have to challenge him a bit."
Following the race, bookmakers cut Diamond Tathagata's Golden Slipper quote from $101 into $26.
"He's shown today he doesn't need a lot of racing going into the Golden Slipper so that will be his next run," Newnham said.
A $100,000 Inglis Premier purchase from the Kooringal Stud draft, Diamond Tathagata was also bred by Kooringal and is the best of four winners from good producing Tale of the Cat (USA) mare Maltese, a half-sister to stakes-winner Jestarella Boy.
Diamond Tathagata is the eighth stakes-winner for Yarraman Park's Hinchinbrook, who has eight entries for the Inglis Premier Yearling Sale starting this Sunday.