diff --git a/app/client/cypress/e2e/Regression/ClientSide/Widgets/ListV2/ListV2_NestedList_spec.ts b/app/client/cypress/e2e/Regression/ClientSide/Widgets/ListV2/ListV2_NestedList_spec.ts
index 0bd956001d..5b0d9269cf 100644
--- a/app/client/cypress/e2e/Regression/ClientSide/Widgets/ListV2/ListV2_NestedList_spec.ts
+++ b/app/client/cypress/e2e/Regression/ClientSide/Widgets/ListV2/ListV2_NestedList_spec.ts
@@ -1,3 +1,4 @@
+import { WIDGET } from "../../../../../locators/WidgetLocators";
 import {
   agHelper,
   entityExplorer,
@@ -13,6 +14,14 @@ describe("Nested List widget V2 ", () => {
   });
 
   it("1. Verify only 3 levels of nesting is allowed", () => {
+    agHelper.AssertContains(
+      "Oops, Something went wrong.",
+      "not.exist",
+      locators._widgetInCanvas(WIDGET.LIST_V2),
+    );
+    agHelper
+      .GetElement(locators._widgetInCanvas(WIDGET.LIST_V2))
+      .should("have.length", 5);
     entityExplorer.SelectEntityByName("List1", "Widgets");
     entityExplorer.SelectEntityByName("Container1", "List1");
     entityExplorer.SelectEntityByName("List2", "Container1");
diff --git a/app/client/cypress/fixtures/listV2NestedDsl.json b/app/client/cypress/fixtures/listV2NestedDsl.json
index 8d8948cea5..d2f772e7c9 100644
--- a/app/client/cypress/fixtures/listV2NestedDsl.json
+++ b/app/client/cypress/fixtures/listV2NestedDsl.json
@@ -1238,7 +1238,7 @@
                     }
                 ],
                 "displayName": "List",
-                "bottomRow": 48,
+                "bottomRow": 88,
                 "parentRowSpace": 10,
                 "hideCard": false,
                 "templateBottomRow": 16,
diff --git a/app/client/src/layoutSystems/common/dropTarget/DropTargetComponentWrapper.tsx b/app/client/src/layoutSystems/common/dropTarget/DropTargetComponentWrapper.tsx
index 45ec5947a6..ecc048b180 100644
--- a/app/client/src/layoutSystems/common/dropTarget/DropTargetComponentWrapper.tsx
+++ b/app/client/src/layoutSystems/common/dropTarget/DropTargetComponentWrapper.tsx
@@ -3,6 +3,10 @@ import type { DropTargetComponentProps } from "layoutSystems/common/dropTarget/D
 import type { ReactNode } from "react";
 import { memo } from "react";
 import React from "react";
+import { useSelector } from "react-redux";
+import { getWidget } from "sagas/selectors";
+import type { AppState } from "@appsmith/reducers";
+import { MAIN_CONTAINER_WIDGET_ID } from "constants/WidgetConstants";
 
 interface DropTargetComponentWrapperProps {
   dropTargetProps: DropTargetComponentProps;
@@ -22,7 +26,11 @@ export const DropTargetComponentWrapper = memo(
     dropDisabled,
     dropTargetProps,
   }: DropTargetComponentWrapperProps) => {
-    if (dropDisabled) {
+    // This code block is added exclusively to handle List Widget Meta Canvas Widget which is generated via template.
+    const widget = useSelector((state: AppState) =>
+      getWidget(state, dropTargetProps.parentId || MAIN_CONTAINER_WIDGET_ID),
+    );
+    if ((dropTargetProps.parentId && !widget) || dropDisabled) {
       //eslint-disable-next-line
       return <>{children}</>;
     }