diff --git a/platform/lang-impl/src/com/intellij/refactoring/rename/inplace/EscapeHandler.java b/platform/lang-impl/src/com/intellij/refactoring/rename/inplace/EscapeHandler.java
new file mode 100644
index 000000000000..ef7f66d7a8c8
--- /dev/null
+++ b/platform/lang-impl/src/com/intellij/refactoring/rename/inplace/EscapeHandler.java
@@ -0,0 +1,63 @@
+/*
+ * 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.
+ */
+package com.intellij.refactoring.rename.inplace;
+
+import com.intellij.codeInsight.lookup.LookupManager;
+import com.intellij.codeInsight.lookup.impl.LookupImpl;
+import com.intellij.codeInsight.template.impl.TemplateManagerImpl;
+import com.intellij.codeInsight.template.impl.TemplateState;
+import com.intellij.openapi.actionSystem.DataContext;
+import com.intellij.openapi.editor.Editor;
+import com.intellij.openapi.editor.SelectionModel;
+import com.intellij.openapi.editor.actionSystem.EditorActionHandler;
+
+/**
+ * User: anna
+ * Date: 12/27/11
+ */
+public class EscapeHandler extends EditorActionHandler {
+  private final EditorActionHandler myOriginalHandler;
+
+  public EscapeHandler(EditorActionHandler originalHandler) {
+    myOriginalHandler = originalHandler;
+  }
+
+  public void execute(Editor editor, DataContext dataContext) {
+    final SelectionModel selectionModel = editor.getSelectionModel();
+    if (selectionModel.hasSelection()) {
+      final TemplateState state = TemplateManagerImpl.getTemplateState(editor);
+      if (state != null && editor.getUserData(VariableInplaceRenamer.INPLACE_RENAMER) != null) {
+        final LookupImpl lookup = (LookupImpl)LookupManager.getActiveLookup(editor);
+        if (lookup != null) {
+          selectionModel.removeSelection();
+          lookup.hide();
+          return;
+        }
+      }
+    }
+
+    myOriginalHandler.execute(editor, dataContext);
+  }
+
+  public boolean isEnabled(Editor editor, DataContext dataContext) {
+    final TemplateState templateState = TemplateManagerImpl.getTemplateState(editor);
+    if (templateState != null && !templateState.isFinished()) {
+      return true;
+    } else {
+      return myOriginalHandler.isEnabled(editor, dataContext);
+    }
+  }
+}
diff --git a/platform/platform-resources/src/META-INF/LangExtensions.xml b/platform/platform-resources/src/META-INF/LangExtensions.xml
index 39b118e7c14e..36785c3b83f3 100644
--- a/platform/platform-resources/src/META-INF/LangExtensions.xml
+++ b/platform/platform-resources/src/META-INF/LangExtensions.xml
@@ -559,6 +559,7 @@
 
   <!-- HighlightManagerActions -->
   <editorActionHandler action="EditorEscape" implementationClass="com.intellij.codeInsight.highlighting.EscapeHandler" order="after hide-hints"/>
+  <editorActionHandler action="EditorEscape" implementationClass="com.intellij.refactoring.rename.inplace.EscapeHandler" order="before hide-hints"/>
 
   <typedHandler implementation="com.intellij.codeInsight.lookup.impl.LookupTypedHandler" id="lookup" order="first"/>
   <typedHandler implementation="com.intellij.codeInsight.editorActions.CompletionAutoPopupHandler" id="completionAutoPopup" order="first"/>