diff --git a/python/src/com/jetbrains/python/validation/Pep8ExternalAnnotator.java b/python/src/com/jetbrains/python/validation/Pep8ExternalAnnotator.java
index f8642b600202..3f8b31b7c7ed 100644
--- a/python/src/com/jetbrains/python/validation/Pep8ExternalAnnotator.java
+++ b/python/src/com/jetbrains/python/validation/Pep8ExternalAnnotator.java
@@ -47,16 +47,22 @@ import com.intellij.psi.PsiFile;
 import com.intellij.psi.PsiWhiteSpace;
 import com.intellij.psi.codeStyle.CodeStyleSettings;
 import com.intellij.psi.codeStyle.CodeStyleSettingsManager;
+import com.intellij.psi.codeStyle.CommonCodeStyleSettings;
 import com.intellij.util.ArrayUtil;
 import com.intellij.util.Consumer;
 import com.intellij.util.IncorrectOperationException;
 import com.jetbrains.python.PythonFileType;
 import com.jetbrains.python.PythonHelpersLocator;
+import com.jetbrains.python.PythonLanguage;
 import com.jetbrains.python.codeInsight.imports.OptimizeImportsQuickFix;
 import com.jetbrains.python.formatter.PyCodeStyleSettings;
 import com.jetbrains.python.inspections.PyPep8Inspection;
 import com.jetbrains.python.inspections.quickfix.ReformatFix;
 import com.jetbrains.python.inspections.quickfix.RemoveTrailingBlankLinesFix;
+import com.jetbrains.python.psi.PyClass;
+import com.jetbrains.python.psi.PyFunction;
+import com.jetbrains.python.psi.PyUtil;
+import com.jetbrains.python.psi.impl.PyPsiUtils;
 import com.jetbrains.python.sdk.PreferredSdkComparator;
 import com.jetbrains.python.sdk.PySdkUtil;
 import com.jetbrains.python.sdk.PythonSdkType;
@@ -76,6 +82,7 @@ import java.util.regex.Pattern;
  */
 public class Pep8ExternalAnnotator extends ExternalAnnotator<Pep8ExternalAnnotator.State, Pep8ExternalAnnotator.Results> {
   private static final Logger LOG = Logger.getInstance(Pep8ExternalAnnotator.class);
+  private static final Pattern E303_LINE_COUNT_PATTERN = Pattern.compile(".*\\((\\d+)\\)$");
 
   public static class Problem {
     private final int myLine;
@@ -222,32 +229,41 @@ public class Pep8ExternalAnnotator extends ExternalAnnotator<Pep8ExternalAnnotat
     final Document document = PsiDocumentManager.getInstance(project).getDocument(file);
 
     for (Problem problem : annotationResult.problems) {
-      if (ignoreDueToSettings(project, problem)) continue;
       final int line = problem.myLine - 1;
       final int column = problem.myColumn - 1;
       int offset;
       if (document != null) {
-        offset = line >= document.getLineCount() ? document.getTextLength()-1 : document.getLineStartOffset(line) + column;
+        offset = line >= document.getLineCount() ? document.getTextLength() - 1 : document.getLineStartOffset(line) + column;
       }
       else {
         offset = StringUtil.lineColToOffset(text, line, column);
       }
       PsiElement problemElement = file.findElementAt(offset);
-      if (!(problemElement instanceof PsiWhiteSpace) && !(problem.myCode.startsWith("E3"))) {
-        final PsiElement elementAfter = file.findElementAt(offset + 1);
-        if (elementAfter instanceof PsiWhiteSpace) {
-          problemElement = elementAfter;
+      // E3xx - blank lines warnings
+      if (!(problemElement instanceof PsiWhiteSpace) && problem.myCode.startsWith("E3")) {
+        final PsiElement elementBefore = file.findElementAt(Math.max(0, offset - 1));
+        if (elementBefore instanceof PsiWhiteSpace) {
+          problemElement = elementBefore;
         }
       }
+      // W292 no newline at end of file
+      if (problemElement == null && document != null && offset == document.getTextLength() && problem.myCode.equals("W292")) {
+        problemElement = file.findElementAt(Math.max(0, offset - 1));
+      }
+
+      if (ignoreDueToSettings(project, problem, problemElement)) {
+        continue;
+      }
+
       if (problemElement != null) {
         TextRange problemRange = problemElement.getTextRange();
-        if (crossesLineBoundary(document, text, problemRange)) {
-          int lineEndOffset;
+        if (!(problemElement instanceof PsiWhiteSpace) && crossesLineBoundary(document, text, problemRange)) {
+          final int lineEndOffset;
           if (document != null) {
-            lineEndOffset = line >= document.getLineCount() ? document.getTextLength()-1 : document.getLineEndOffset(line);
+            lineEndOffset = line >= document.getLineCount() ? document.getTextLength() - 1 : document.getLineEndOffset(line);
           }
           else {
-            lineEndOffset = StringUtil.lineColToOffset(text, line+1, 0) - 1;
+            lineEndOffset = StringUtil.lineColToOffset(text, line + 1, 0) - 1;
           }
           if (offset > lineEndOffset) {
             // PSI/document don't match, don't try to highlight random places
@@ -296,15 +312,48 @@ public class Pep8ExternalAnnotator extends ExternalAnnotator<Pep8ExternalAnnotat
     return StringUtil.offsetToLineNumber(text, start) != StringUtil.offsetToLineNumber(text, end);
   }
 
-  private static boolean ignoreDueToSettings(Project project, Problem problem) {
-    String stripTrailingSpaces = EditorSettingsExternalizable.getInstance().getStripTrailingSpaces();
-    if (!stripTrailingSpaces.equals(EditorSettingsExternalizable.STRIP_TRAILING_SPACES_NONE)) {
+  private static boolean ignoreDueToSettings(Project project, Problem problem, PsiElement element) {
+    final EditorSettingsExternalizable editorSettings = EditorSettingsExternalizable.getInstance();
+    if (!editorSettings.getStripTrailingSpaces().equals(EditorSettingsExternalizable.STRIP_TRAILING_SPACES_NONE)) {
       // ignore trailing spaces errors if they're going to disappear after save
       if (problem.myCode.equals("W291") || problem.myCode.equals("W293")) {
         return true;
       }
     }
-    boolean useTabs = CodeStyleSettingsManager.getSettings(project).useTabCharacter(PythonFileType.INSTANCE);
+    // W292 no newline at end of file
+    if (editorSettings.isEnsureNewLineAtEOF() && problem.myCode.equals("W292")) {
+      return true;
+    }
+
+    final CodeStyleSettings codeStyleSettings = CodeStyleSettingsManager.getSettings(project);
+    final CommonCodeStyleSettings commonSettings = codeStyleSettings.getCommonSettings(PythonLanguage.getInstance());
+    final PyCodeStyleSettings pySettings = codeStyleSettings.getCustomSettings(PyCodeStyleSettings.class);
+    // E303 too many blank lines (num)
+    if (problem.myCode.equals("E303") && element instanceof PsiWhiteSpace) {
+      final Matcher matcher = E303_LINE_COUNT_PATTERN.matcher(problem.myDescription);
+      if (matcher.matches()) {
+        final int reportedBlanks = Integer.parseInt(matcher.group(1));
+        final PsiElement nonWhitespaceAfter = PyPsiUtils.getNextNonWhitespaceSibling(element);
+        final PsiElement nonWhitespaceBefore = PyPsiUtils.getPrevNonWhitespaceSibling(element);
+        final boolean classNearby = nonWhitespaceBefore instanceof PyClass || nonWhitespaceAfter instanceof PyClass;
+        final boolean functionNearby = nonWhitespaceBefore instanceof PyFunction || nonWhitespaceAfter instanceof PyFunction;
+        if (functionNearby || classNearby) {
+          if (PyUtil.isTopLevel(element)) {
+            if (reportedBlanks <= pySettings.BLANK_LINES_AROUND_TOP_LEVEL_CLASSES_FUNCTIONS) {
+              return true;
+            }
+          }
+          else {
+            // Blanks around classes have priority over blanks around functions as defined in Python spacing builder
+            if (classNearby && reportedBlanks <= commonSettings.BLANK_LINES_AROUND_CLASS ||
+                functionNearby && reportedBlanks <= commonSettings.BLANK_LINES_AROUND_METHOD) {
+              return true;
+            }
+          }
+        }
+      }
+    }
+    final boolean useTabs = codeStyleSettings.useTabCharacter(PythonFileType.INSTANCE);
     if (useTabs && problem.myCode.equals("W191")) {
       return true;
     }