diff --git a/java/java-impl/src/com/intellij/codeInsight/completion/JavaInheritorsGetter.java b/java/java-impl/src/com/intellij/codeInsight/completion/JavaInheritorsGetter.java
index baa48c694966..89a928ecb034 100644
--- a/java/java-impl/src/com/intellij/codeInsight/completion/JavaInheritorsGetter.java
+++ b/java/java-impl/src/com/intellij/codeInsight/completion/JavaInheritorsGetter.java
@@ -135,8 +135,11 @@ public class JavaInheritorsGetter extends CompletionProvider<CompletionParameter
         final PsiStatement statement = elementFactory
           .createStatementFromText(psiType.getCanonicalText() + " v = new " + canonicalText + "<>()", parameters.getOriginalFile());
         final PsiVariable declaredVar = (PsiVariable)((PsiDeclarationStatement)statement).getDeclaredElements()[0];
-        final PsiExpression initializer = declaredVar.getInitializer();
-        psiType = initializer.getType();
+        final PsiNewExpression initializer = (PsiNewExpression)declaredVar.getInitializer();
+        final boolean hasDefaultConstructorOrNoGenericsOne = PsiDiamondType.hasDefaultConstructor(psiClass) || !PsiDiamondType.haveConstructorsGenericsParameters(psiClass);
+        if (hasDefaultConstructorOrNoGenericsOne && PsiDiamondType.resolveInferredTypes(initializer).getErrorMessage() == null) {
+          psiType = initializer.getType();
+        }
       }
     }
     final LookupItem item = PsiTypeLookupItem.createLookupItem(psiType, parameters.getPosition());
diff --git a/java/java-tests/testData/codeInsight/completion/smartType/DiamondNotCollapsed-out.java b/java/java-tests/testData/codeInsight/completion/smartType/DiamondNotCollapsed-out.java
new file mode 100644
index 000000000000..f9430cdb29a0
--- /dev/null
+++ b/java/java-tests/testData/codeInsight/completion/smartType/DiamondNotCollapsed-out.java
@@ -0,0 +1,24 @@
+/*
+ * Copyright 2000-2011 JetBrains s.r.o.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+class MyClass {
+  public void foo() {
+    MyDD<String> d = new MyDD<String>()
+  }
+}
+
+class MyDD<T> {
+  MyDD(T t){}
+}
\ No newline at end of file
diff --git a/java/java-tests/testData/codeInsight/completion/smartType/DiamondNotCollapsed.java b/java/java-tests/testData/codeInsight/completion/smartType/DiamondNotCollapsed.java
new file mode 100644
index 000000000000..69a12ec44ec7
--- /dev/null
+++ b/java/java-tests/testData/codeInsight/completion/smartType/DiamondNotCollapsed.java
@@ -0,0 +1,24 @@
+/*
+ * Copyright 2000-2011 JetBrains s.r.o.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+class MyClass {
+  public void foo() {
+    MyDD<String> d = new MyD<caret>
+  }
+}
+
+class MyDD<T> {
+  MyDD(T t){}
+}
\ No newline at end of file
diff --git a/java/java-tests/testSrc/com/intellij/codeInsight/completion/SmartType17CompletionTest.java b/java/java-tests/testSrc/com/intellij/codeInsight/completion/SmartType17CompletionTest.java
index bd05bbca53c3..7ee850dac128 100644
--- a/java/java-tests/testSrc/com/intellij/codeInsight/completion/SmartType17CompletionTest.java
+++ b/java/java-tests/testSrc/com/intellij/codeInsight/completion/SmartType17CompletionTest.java
@@ -49,6 +49,10 @@ public class SmartType17CompletionTest extends LightFixtureCompletionTestCase {
     doTest();
   }
 
+  public void testDiamondNotCollapsed() throws Exception {
+    doTest();
+  }
+
 
   private void doTest() throws Exception {
     configureByFile("/" + getTestName(false) + ".java");
diff --git a/java/openapi/src/com/intellij/psi/PsiDiamondType.java b/java/openapi/src/com/intellij/psi/PsiDiamondType.java
index 084e408129e0..5b1488918a12 100644
--- a/java/openapi/src/com/intellij/psi/PsiDiamondType.java
+++ b/java/openapi/src/com/intellij/psi/PsiDiamondType.java
@@ -22,6 +22,7 @@ import com.intellij.openapi.util.text.StringUtil;
 import com.intellij.psi.codeStyle.JavaCodeStyleManager;
 import com.intellij.psi.search.GlobalSearchScope;
 import com.intellij.psi.util.PsiTreeUtil;
+import com.intellij.psi.util.PsiUtil;
 import com.intellij.util.Function;
 import org.jetbrains.annotations.NonNls;
 import org.jetbrains.annotations.NotNull;
@@ -300,4 +301,46 @@ public class PsiDiamondType extends PsiType {
       });
     }
   }
+
+  public static boolean hasDefaultConstructor(@NotNull final PsiClass psiClass) {
+    final PsiMethod[] constructors = psiClass.getConstructors();
+    for (PsiMethod method : constructors) {
+      if (method.getParameterList().getParametersCount() == 0) return true;
+    }
+    return constructors.length == 0;
+  }
+
+  public static boolean haveConstructorsGenericsParameters(@NotNull final PsiClass psiClass) {
+    for (PsiMethod method : psiClass.getConstructors()) {
+      for (PsiParameter parameter : method.getParameterList().getParameters()) {
+        final PsiType type = parameter.getType();
+        final Boolean accept = type.accept(new PsiTypeVisitor<Boolean>() {
+          @Override
+          public Boolean visitArrayType(PsiArrayType arrayType) {
+            return arrayType.getComponentType().accept(this);
+          }
+
+          @Override
+          public Boolean visitClassType(PsiClassType classType) {
+            for (PsiType psiType : classType.getParameters()) {
+              if (psiType != null) {
+                final Boolean typaParamFound = psiType.accept(this);
+                if (typaParamFound != null && typaParamFound) return true;
+              }
+            }
+            return PsiUtil.resolveClassInType(classType) instanceof PsiTypeParameter;
+          }
+
+          @Override
+          public Boolean visitWildcardType(PsiWildcardType wildcardType) {
+            final PsiType bound = wildcardType.getBound();
+            if (bound == null) return false;
+            return bound.accept(this);
+          }
+        });
+        if (accept != null && accept.booleanValue()) return true;
+      }
+    }
+    return false;
+  }
 }