Batch file can't find program

[kinook]

Something must be missing, but I'm not sure what. I tried a similar test here:

1) Installed ActivePython 2.3.2.232 to C:\Python (it added C:\Python, where Python.exe was copied, to the PATH environment variable).

2) Created c:\temp\test.bat with contents 'python.exe'

3) Created c:\ptest.bld with contents
<step action='Run Program' type='0'>
<command>%DOSCMD% c:\temp\test.bat</command>
<name>New Step</name>
<outputfrom type='3'>1</outputfrom>
<startin>c:\temp</startin>
</step>

4) Built ptest.bld. Output:
Building project step 'New Step'...

c:\temp>python.exe
Build successfully completed.

5) Moved C:\Python\Python.exe to c:\ and rebuilt ptest.bld. Output:
Building project step 'New Step'...

c:\temp>python.exe
'python.exe' is not recognized as an internal or external command,
operable program or batch file.

Process completed with exit code 1
Step 'New Step' failed
Build ended.