Exclude categories from loop?

Exclude categories from loop?

I have the following code that grabs all the categories that the post has
been categorised in. I want to exclude certain categories but just putting
in exclude=1066 within the usual places doesn't seem to work.
The category 1066is actually a parent category, I want to exclude it and
all of it's child categories.
<?php $categories = wp_get_post_categories( $post->ID, array( 'fields' =>
'ids' ) );
$separator = '';
if ( $categories ) {
$cat_ids = implode( ',' , $categories );
$cats = wp_list_categories( 'title_li=&style=none&echo=0&include=' .
$cat_ids );
$cats = rtrim( trim( str_replace( '', $separator, $cats ) ),
$separator );
echo $cats;
}?>
This code is taken from
http://codex.wordpress.org/Template_Tags/wp_list_categories in the section
"Display Categories Assigned to a Post"