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Rydal Water, which was once known as Rothaymere, is a short distance downstream along the River Rothay from Grasmere, which lies to the west. Rydal Water is a small and placid glacial lake very similar to Grasmere, and glacial deposits called drumlins have formed small islands on the tiny lake.

No public boats are allowed on Rydal Water, and, during summer months, the southern shore is a very poular spot for picnics and sunbathing. There are attractive walks around the lake, particulary that which travels to Grasmere along the southern shore past Rydal Caves. Some of the finest views of the lake are to be had from the 'Coffin Trail', a path to Grasmere used by medieval coffin-bearers, who carried the deceased beneath Nab Scar to St. Oswald's Church in Grasmere. There is also a rocky outcrop at the western end of the lake which commands dramatic views of Rydal Water. This is believed to have been one of the poet William Wordsworth's favourite places in the Lake District and has consequently been given the name Wordsworth