diff --git a/java/idea-ui/src/com/intellij/ide/util/newProjectWizard/SelectTemplateStep.form b/java/idea-ui/src/com/intellij/ide/util/newProjectWizard/SelectTemplateStep.form
index 2165b8970814..fc071c17fc98 100644
--- a/java/idea-ui/src/com/intellij/ide/util/newProjectWizard/SelectTemplateStep.form
+++ b/java/idea-ui/src/com/intellij/ide/util/newProjectWizard/SelectTemplateStep.form
@@ -1,6 +1,6 @@
 <?xml version="1.0" encoding="UTF-8"?>
 <form xmlns="http://www.intellij.com/uidesigner/form/" version="1" bind-to-class="com.intellij.ide.util.newProjectWizard.SelectTemplateStep">
-  <grid id="27dc6" binding="myPanel" layout-manager="GridLayoutManager" row-count="2" column-count="2" same-size-horizontally="false" same-size-vertically="false" hgap="-1" vgap="-1">
+  <grid id="27dc6" binding="myPanel" layout-manager="GridLayoutManager" row-count="1" column-count="2" same-size-horizontally="false" same-size-vertically="false" hgap="-1" vgap="-1">
     <margin top="0" left="0" bottom="0" right="0"/>
     <constraints>
       <xy x="20" y="20" width="608" height="393"/>
@@ -10,7 +10,7 @@
     <children>
       <grid id="ac540" layout-manager="BorderLayout" hgap="0" vgap="0">
         <constraints>
-          <grid row="1" column="0" row-span="1" col-span="1" vsize-policy="3" hsize-policy="3" anchor="8" fill="2" indent="0" use-parent-layout="false">
+          <grid row="0" column="0" row-span="1" col-span="1" vsize-policy="3" hsize-policy="3" anchor="8" fill="2" indent="0" use-parent-layout="false">
             <preferred-size width="155" height="44"/>
           </grid>
         </constraints>
@@ -37,37 +37,18 @@
           </scrollpane>
         </children>
       </grid>
-      <component id="dafde" class="com.intellij.ui.components.JBLabel">
+      <grid id="e5cc3" layout-manager="GridLayoutManager" row-count="5" column-count="1" same-size-horizontally="false" same-size-vertically="false" hgap="-1" vgap="-1">
+        <margin top="5" left="5" bottom="0" right="0"/>
         <constraints>
-          <grid row="0" column="0" row-span="1" col-span="2" vsize-policy="0" hsize-policy="0" anchor="8" fill="0" indent="0" use-parent-layout="false"/>
-        </constraints>
-        <properties>
-          <text value="Please select desired template from the list"/>
-        </properties>
-      </component>
-      <grid id="e5cc3" layout-manager="GridLayoutManager" row-count="4" column-count="1" same-size-horizontally="false" same-size-vertically="false" hgap="-1" vgap="-1">
-        <margin top="0" left="0" bottom="0" right="0"/>
-        <constraints>
-          <grid row="1" column="1" row-span="1" col-span="1" vsize-policy="3" hsize-policy="7" anchor="0" fill="3" indent="0" use-parent-layout="false"/>
+          <grid row="0" column="1" row-span="1" col-span="1" vsize-policy="3" hsize-policy="7" anchor="0" fill="3" indent="0" use-parent-layout="false"/>
         </constraints>
         <properties/>
         <border type="none"/>
         <children>
-          <grid id="caf4" binding="mySettingsPanel" layout-manager="BorderLayout" hgap="0" vgap="0">
-            <constraints>
-              <grid row="1" column="0" row-span="1" col-span="1" vsize-policy="7" hsize-policy="7" anchor="0" fill="3" indent="0" use-parent-layout="false"/>
-            </constraints>
-            <properties/>
-            <clientProperties>
-              <BorderFactoryClass class="java.lang.String" value="com.intellij.ui.IdeBorderFactory$PlainSmallWithIndent"/>
-            </clientProperties>
-            <border type="etched" title="Settings"/>
-            <children/>
-          </grid>
           <grid id="5732c" binding="myDescriptionPanel" layout-manager="GridLayoutManager" row-count="1" column-count="1" same-size-horizontally="false" same-size-vertically="false" hgap="-1" vgap="-1">
             <margin top="0" left="0" bottom="0" right="0"/>
             <constraints>
-              <grid row="0" column="0" row-span="1" col-span="1" vsize-policy="3" hsize-policy="7" anchor="0" fill="3" indent="0" use-parent-layout="false"/>
+              <grid row="1" column="0" row-span="1" col-span="1" vsize-policy="7" hsize-policy="7" anchor="0" fill="3" indent="0" use-parent-layout="false"/>
             </constraints>
             <properties/>
             <clientProperties>
@@ -84,14 +65,14 @@
                 <properties>
                   <contentType value="text/html"/>
                   <editable value="false"/>
-                  <text value="&lt;html&gt;&#13;&#10;  &lt;head&gt;&#13;&#10;    &#13;&#10;  &lt;/head&gt;&#13;&#10;  &lt;body&gt;&#13;&#10;  &lt;/body&gt;&#13;&#10;&lt;/html&gt;&#13;&#10;"/>
+                  <text value="&lt;html&gt;&#13;&#10;  &lt;head&gt;&#13;&#10;&#13;&#10;  &lt;/head&gt;&#13;&#10;  &lt;body&gt;&#13;&#10;    &lt;p style=&quot;margin-top: 0&quot;&gt;&#13;&#10;      &#13;&#10;    &lt;/p&gt;&#13;&#10;  &lt;/body&gt;&#13;&#10;&lt;/html&gt;&#13;&#10;"/>
                 </properties>
               </component>
             </children>
           </grid>
           <grid id="5d4a2" binding="myExpertPlaceholder" layout-manager="BorderLayout" hgap="0" vgap="0">
             <constraints>
-              <grid row="3" column="0" row-span="1" col-span="1" vsize-policy="3" hsize-policy="3" anchor="0" fill="3" indent="0" use-parent-layout="false"/>
+              <grid row="4" column="0" row-span="1" col-span="1" vsize-policy="3" hsize-policy="3" anchor="0" fill="3" indent="0" use-parent-layout="false"/>
             </constraints>
             <properties/>
             <border type="none"/>
@@ -106,7 +87,7 @@
           </grid>
           <grid id="fb50c" binding="myModulePanel" layout-manager="GridBagLayout">
             <constraints>
-              <grid row="2" column="0" row-span="1" col-span="1" vsize-policy="3" hsize-policy="3" anchor="0" fill="3" indent="0" use-parent-layout="false"/>
+              <grid row="3" column="0" row-span="1" col-span="1" vsize-policy="3" hsize-policy="3" anchor="0" fill="3" indent="0" use-parent-layout="false"/>
             </constraints>
             <properties/>
             <border type="none"/>
@@ -168,6 +149,22 @@
               </component>
             </children>
           </grid>
+          <grid id="caf4" binding="mySettingsPanel" layout-manager="BorderLayout" hgap="0" vgap="0">
+            <constraints>
+              <grid row="0" column="0" row-span="1" col-span="1" vsize-policy="3" hsize-policy="7" anchor="0" fill="3" indent="0" use-parent-layout="false"/>
+            </constraints>
+            <properties/>
+            <clientProperties>
+              <BorderFactoryClass class="java.lang.String" value="com.intellij.ui.IdeBorderFactory$PlainSmallWithIndent"/>
+            </clientProperties>
+            <border type="none"/>
+            <children/>
+          </grid>
+          <vspacer id="44e0b">
+            <constraints>
+              <grid row="2" column="0" row-span="1" col-span="1" vsize-policy="6" hsize-policy="1" anchor="0" fill="2" indent="0" use-parent-layout="false"/>
+            </constraints>
+          </vspacer>
         </children>
       </grid>
     </children>
diff --git a/java/idea-ui/src/com/intellij/ide/util/newProjectWizard/SelectTemplateStep.java b/java/idea-ui/src/com/intellij/ide/util/newProjectWizard/SelectTemplateStep.java
index ba846191f108..163931be7130 100644
--- a/java/idea-ui/src/com/intellij/ide/util/newProjectWizard/SelectTemplateStep.java
+++ b/java/idea-ui/src/com/intellij/ide/util/newProjectWizard/SelectTemplateStep.java
@@ -242,18 +242,20 @@ public class SelectTemplateStep extends ModuleWizardStep implements SettingsStep
       }
     });
 
-    //if (myTemplatesTree.getModel().getSize() > 0) {
-    //  myTemplatesTree.setSelectedIndex(0);
-    //}
     mySearchField.addDocumentListener(new DocumentAdapter() {
       @Override
       protected void textChanged(DocumentEvent e) {
         doFilter();
       }
     });
+
     myDescriptionPanel.setVisible(false);
-    mySettingsPanel.setVisible(false);
-    myExpertPanel.setVisible(false);
+    if (myWizardContext.isCreatingNewProject()) {
+      addField("Project \u001bformat:", myFormatPanel.getStorageFormatComboBox(), myModulePanel);
+    }
+
+//    mySettingsPanel.setVisible(false);
+//    myExpertPanel.setVisible(false);
 
     new AnAction() {
       @Override
@@ -314,11 +316,8 @@ public class SelectTemplateStep extends ModuleWizardStep implements SettingsStep
   private void setupPanels(@Nullable ProjectTemplate template) {
 
     restorePanel(myNamePathComponent, 4);
-    restorePanel(myModulePanel, 6);
+    restorePanel(myModulePanel, myWizardContext.isCreatingNewProject() ? 8 : 6);
     restorePanel(myExpertPanel, myWizardContext.isCreatingNewProject() ? 1 : 0);
-    if (myWizardContext.isCreatingNewProject()) {
-      addExpertField("Project \u001bformat:", myFormatPanel.getStorageFormatComboBox());
-    }
     mySettingsStep = myModuleBuilder == null ? null : myModuleBuilder.modifySettingsStep(this);
 
     String description = null;
@@ -333,8 +332,8 @@ public class SelectTemplateStep extends ModuleWizardStep implements SettingsStep
       }
     }
 
-    mySettingsPanel.setVisible(template != null);
-    myExpertPlaceholder.setVisible(template != null && myExpertPanel.getComponentCount() > 0);
+//    mySettingsPanel.setVisible(template != null);
+    myExpertPlaceholder.setVisible(myExpertPanel.getComponentCount() > 0);
     myDescriptionPanel.setVisible(StringUtil.isNotEmpty(description));
 
     mySettingsPanel.revalidate();
diff --git a/java/idea-ui/src/com/intellij/ide/util/projectWizard/JavaSettingsStep.java b/java/idea-ui/src/com/intellij/ide/util/projectWizard/JavaSettingsStep.java
index a0d74f2dafa9..696ec24c4898 100644
--- a/java/idea-ui/src/com/intellij/ide/util/projectWizard/JavaSettingsStep.java
+++ b/java/idea-ui/src/com/intellij/ide/util/projectWizard/JavaSettingsStep.java
@@ -47,7 +47,7 @@ public class JavaSettingsStep extends SdkSettingsStep {
   private JPanel myPanel;
 
   public JavaSettingsStep(SettingsStep settingsStep, ModuleBuilder moduleBuilder, Condition<SdkTypeId> sdkFilter) {
-    super(settingsStep, sdkFilter);
+    super(settingsStep, moduleBuilder, sdkFilter);
     myModuleBuilder = moduleBuilder;
 
     if (moduleBuilder instanceof JavaModuleBuilder) {
diff --git a/java/idea-ui/src/com/intellij/ide/util/projectWizard/SdkSettingsStep.java b/java/idea-ui/src/com/intellij/ide/util/projectWizard/SdkSettingsStep.java
index f43edac46008..601e5198a146 100644
--- a/java/idea-ui/src/com/intellij/ide/util/projectWizard/SdkSettingsStep.java
+++ b/java/idea-ui/src/com/intellij/ide/util/projectWizard/SdkSettingsStep.java
@@ -19,6 +19,7 @@ import com.intellij.openapi.options.ConfigurationException;
 import com.intellij.openapi.project.Project;
 import com.intellij.openapi.projectRoots.Sdk;
 import com.intellij.openapi.projectRoots.SdkTypeId;
+import com.intellij.openapi.roots.ProjectRootManager;
 import com.intellij.openapi.roots.ui.configuration.JdkComboBox;
 import com.intellij.openapi.roots.ui.configuration.projectRoot.ProjectSdksModel;
 import com.intellij.openapi.util.Condition;
@@ -35,7 +36,7 @@ public class SdkSettingsStep extends ModuleWizardStep {
   protected final WizardContext myWizardContext;
   protected final ProjectSdksModel myModel;
 
-  public SdkSettingsStep(SettingsStep settingsStep, Condition<SdkTypeId> sdkFilter) {
+  public SdkSettingsStep(SettingsStep settingsStep, ModuleBuilder moduleBuilder, Condition<SdkTypeId> sdkFilter) {
 
     myWizardContext = settingsStep.getContext();
     myModel = new ProjectSdksModel();
@@ -44,6 +45,14 @@ public class SdkSettingsStep extends ModuleWizardStep {
 
     myJdkComboBox = new JdkComboBox(myModel, sdkFilter);
 
+    if (project != null) {
+      Sdk sdk = ProjectRootManager.getInstance(project).getProjectSdk();
+      if (sdk != null && moduleBuilder.isSuitableSdkType(sdk.getSdkType())) {
+        // use default project SDK
+        return;
+      }
+    }
+
     JButton button = new JButton("\u001BNew...");
     myJdkComboBox.setSetupButton(button, project, myModel,
                                  project == null ? new JdkComboBox.NoneJdkComboBoxItem() : new JdkComboBox.ProjectJdkComboBoxItem(),
diff --git a/java/java-impl/src/com/intellij/openapi/module/JavaModuleType.java b/java/java-impl/src/com/intellij/openapi/module/JavaModuleType.java
index 388cc7fa2fc2..3226588382d4 100644
--- a/java/java-impl/src/com/intellij/openapi/module/JavaModuleType.java
+++ b/java/java-impl/src/com/intellij/openapi/module/JavaModuleType.java
@@ -105,15 +105,6 @@ public class JavaModuleType extends ModuleType<JavaModuleBuilder> {
   @Nullable
   @Override
   public ModuleWizardStep modifySettingsStep(SettingsStep settingsStep, final ModuleBuilder moduleBuilder) {
-    Project project = settingsStep.getContext().getProject();
-    if (project != null) {
-      Sdk sdk = ProjectRootManager.getInstance(project).getProjectSdk();
-      if (sdk != null && moduleBuilder.isSuitableSdkType(sdk.getSdkType())) {
-        // use default project SDK
-//        context.setProjectJdk(sdk);
-        return null;
-      }
-    }
     return ProjectWizardStepFactory.getInstance().createJavaSettingsStep(settingsStep, moduleBuilder, new Condition<SdkTypeId>() {
       @Override
       public boolean value(SdkTypeId sdkType) {