It's actually even possible to defeat this dragon without a character dying.
He attacks with energy, so for the defense try to get up the the energy resistance and luck stat by visiting locations which raise them temporary as much as possible, do also get the character levels up before casting "Shield" or "DoS" to reduce the damage as much as possible. This way eradication hardly ever happens since only little damage will get through.
Offensive buffing with wells, shrines and spells is also very useful.
The sorcerer spell which makes dragons sleep and and the cleric spell which halves enemy hitpoints are very useful in the battle.
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