diff --git a/java/java-tests/testSrc/com/intellij/codeInsight/template/LiveTemplateTest.groovy b/java/java-tests/testSrc/com/intellij/codeInsight/template/LiveTemplateTest.groovy
index 5ce0dd07c4d4..2a4df962e8d7 100644
--- a/java/java-tests/testSrc/com/intellij/codeInsight/template/LiveTemplateTest.groovy
+++ b/java/java-tests/testSrc/com/intellij/codeInsight/template/LiveTemplateTest.groovy
@@ -23,7 +23,6 @@ import com.intellij.codeInsight.lookup.impl.LookupImpl
 import com.intellij.codeInsight.lookup.impl.LookupManagerImpl
 import com.intellij.codeInsight.template.impl.*
 import com.intellij.codeInsight.template.macro.*
-import com.intellij.openapi.actionSystem.IdeActions
 import com.intellij.openapi.command.WriteCommandAction
 import com.intellij.openapi.editor.Editor
 import com.intellij.openapi.editor.impl.DocumentImpl
@@ -957,24 +956,6 @@ class Foo {
       return calculateResult(params, context)
     }
   }
-
-  public void "test escape shouldn't move caret to the end marker"() {
-    myFixture.configureByText 'a.java', """
-class Foo {{
-  itar<caret>
-}}
-"""
-    myFixture.type '\ta'
-    myFixture.performEditorAction(IdeActions.ACTION_EDITOR_ESCAPE)
-    myFixture.checkResult """
-class Foo {{
-    for (int a<caret> = 0; a < array.length; a++) {
-         = array[a];
-        
-    }
-}}
-"""
-  }
   
   public void "test add new line on enter outside editing variable"() {
     myFixture.configureByText 'a.java', """
diff --git a/platform/lang-impl/src/com/intellij/codeInsight/template/impl/TemplateState.java b/platform/lang-impl/src/com/intellij/codeInsight/template/impl/TemplateState.java
index 237c262ef4cf..5e25eb75f3b4 100644
--- a/platform/lang-impl/src/com/intellij/codeInsight/template/impl/TemplateState.java
+++ b/platform/lang-impl/src/com/intellij/codeInsight/template/impl/TemplateState.java
@@ -146,14 +146,14 @@ public class TemplateState implements Disposable {
       @Override
       public void caretAdded(CaretEvent e) {
         if (isMultiCaretMode()) {
-          finishTemplateEditing();
+          finishTemplateEditing(false);
         }
       }
 
       @Override
       public void caretRemoved(CaretEvent e) {
         if (isMultiCaretMode()) {
-          finishTemplateEditing();
+          finishTemplateEditing(false);
         }
       }
     };
@@ -401,7 +401,7 @@ public class TemplateState implements Disposable {
         }
 
         if (nextVariableNumber == -1) {
-          finishTemplateEditing();
+          finishTemplateEditing(false);
         }
         else {
           setCurrentVariableNumber(nextVariableNumber);
@@ -410,7 +410,7 @@ public class TemplateState implements Disposable {
           focusCurrentExpression();
           currentVariableChanged(-1);
           if (isMultiCaretMode()) {
-            finishTemplateEditing();
+            finishTemplateEditing(false);
           }
         }
       }
@@ -668,7 +668,7 @@ public class TemplateState implements Disposable {
       final TextResult value = getVariableValue(variableName);
       if (value != null && !value.getText().isEmpty()) {
         if (!myProcessor.process(variableName, value.getText())) {
-          finishTemplateEditing(); // nextTab(); ?
+          finishTemplateEditing(false); // nextTab(); ?
           return;
         }
       }
@@ -856,7 +856,7 @@ public class TemplateState implements Disposable {
           reformat(null);
         }
       });
-      finishTemplateEditing();
+      finishTemplateEditing(false);
       return;
     }
     focusCurrentHighlighter(false);
@@ -931,30 +931,36 @@ public class TemplateState implements Disposable {
 
   public void gotoEnd(boolean brokenOff) {
     if (myTemplate == null) return;
-    LookupManager.getInstance(myProject).hideActiveLookup();
     calcResults(false);
     if (!brokenOff) {
       doReformat(null);
     }
-    setFinalEditorState(brokenOff);
-    cleanupTemplateState(brokenOff);
+    finishTemplateEditing(brokenOff);
   }
 
   public void gotoEnd() {
     gotoEnd(true);
   }
 
-  private void finishTemplateEditing() {
+  public void cancelTemplate() {
     if (myTemplate == null) return;
+
     LookupManager.getInstance(myProject).hideActiveLookup();
-    setFinalEditorState(false);
-    cleanupTemplateState(false);
+
+    cleanupTemplateState(true);
   }
 
-  private void setFinalEditorState(boolean brokenOff) {
-    myEditor.getSelectionModel().removeSelection();
-    if (brokenOff && !((TemplateManagerImpl)TemplateManager.getInstance(myProject)).shouldSkipInTests()) return;
-    
+  private void finishTemplateEditing(boolean brokenOff) {
+    if (myTemplate == null) return;
+
+
+    LookupManager.getInstance(myProject).hideActiveLookup();
+
+    setFinalEditorState();
+    cleanupTemplateState(brokenOff);
+  }
+
+  private void setFinalEditorState() {
     int selectionSegment = myTemplate.getVariableSegmentNumber(TemplateImpl.SELECTION);
     int endSegmentNumber = selectionSegment >= 0 && getSelectionBeforeTemplate() == null ? selectionSegment : myTemplate.getEndSegmentNumber();
     int offset = -1;
@@ -975,7 +981,8 @@ public class TemplateState implements Disposable {
       myEditor.getCaretModel().moveToOffset(offset);
       myEditor.getScrollingModel().scrollToCaret(ScrollType.RELATIVE);
     }
-    
+
+    myEditor.getSelectionModel().removeSelection();
     int selStart = myTemplate.getSelectionStartSegmentNumber();
     int selEnd = myTemplate.getSelectionEndSegmentNumber();
     if (selStart >= 0 && selEnd >= 0) {
diff --git a/platform/lang-impl/src/com/intellij/codeInsight/template/macro/BaseCompleteMacro.java b/platform/lang-impl/src/com/intellij/codeInsight/template/macro/BaseCompleteMacro.java
index a947a3554d45..d2616efdd6e4 100644
--- a/platform/lang-impl/src/com/intellij/codeInsight/template/macro/BaseCompleteMacro.java
+++ b/platform/lang-impl/src/com/intellij/codeInsight/template/macro/BaseCompleteMacro.java
@@ -115,7 +115,7 @@ public abstract class BaseCompleteMacro extends Macro {
           templateState.nextTab();
         }
         else if (caret > range.getEndOffset()) {
-          templateState.gotoEnd(true);
+          templateState.cancelTemplate();
         }
       }
     }
diff --git a/xml/impl/src/com/intellij/codeInsight/completion/XmlTagInsertHandler.java b/xml/impl/src/com/intellij/codeInsight/completion/XmlTagInsertHandler.java
index effac153e74e..21e55ff2f4e2 100644
--- a/xml/impl/src/com/intellij/codeInsight/completion/XmlTagInsertHandler.java
+++ b/xml/impl/src/com/intellij/codeInsight/completion/XmlTagInsertHandler.java
@@ -1,5 +1,5 @@
 /*
- * Copyright 2000-2015 JetBrains s.r.o.
+ * Copyright 2000-2014 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.
@@ -157,13 +157,13 @@ public class XmlTagInsertHandler implements InsertHandler<LookupElement> {
       public void templateFinished(final Template template, boolean brokenOff) {
         final int offset = editor.getCaretModel().getOffset();
 
-        if (chooseAttributeName && offset > 0) {
-          char c = editor.getDocument().getCharsSequence().charAt(offset - 1);
+        if (chooseAttributeName && offset >= 3) {
+          char c = editor.getDocument().getCharsSequence().charAt(offset - 3);
           if (c == '/' || (c == ' ' && brokenOff)) {
             new WriteCommandAction.Simple(project) {
               @Override
               protected void run() throws Throwable {
-                editor.getDocument().replaceString(offset, offset + 3, ">");
+                editor.getDocument().replaceString(offset - 2, offset + 1, ">");
               }
             }.execute();
           }