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James plays the younger version of Streep Donna in the musical, which is scheduled for release next week.
The 29-year-old will be best known to fans for her work at Downton Abbey, the Cinderella live-action, and the critically acclaimed Baby Driver last year
In the new musical she takes the lion's share – as the soundtrack reveals, today
"I did not know Lily James had singing chops," Streep said.
"Some people are singing from the foot of their feet, right now She's shaking the rafters, she's amazing."
James said, "When I found out I would be part of the suite, I was terrified and very excited. "
" Donna is such a beloved character and Meryl Streep is the best actress of all time. "
" Lily has great energy, "Streep beamed.
"She's just perfect.
Streep was not seen much in the trailers of the sequel, suggesting that Donna could have died.
Although the megastar Appear on the soundtrack, many have assumed that it will be seen in the spiritual form of a ghost.
"I never really thought that there would be a sequel," she admitted. "When this script arrived, it cut my breath."
She added: "Walking on the set and seeing Colin [Firth] and Stellan [Skarsgard] and Pierce [Brosnan] and Christine Baranski and Julie Walters and Dominic [Cooper] and Amanda [Seyfried] …
"The music starts and you put on spandex and honey, everything comes together."
Mamma Mia: Here We Go Again is on July 20.
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