diff --git a/python/openapi/src/com/jetbrains/python/packaging/PyProcessCancelledException.java b/python/openapi/src/com/jetbrains/python/packaging/PyProcessCancelledException.java
new file mode 100644
index 000000000000..9721bec0bb86
--- /dev/null
+++ b/python/openapi/src/com/jetbrains/python/packaging/PyProcessCancelledException.java
@@ -0,0 +1,29 @@
+/*
+ * 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.
+ * 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.jetbrains.python.packaging;
+
+import org.jetbrains.annotations.NotNull;
+
+import java.util.List;
+
+/**
+ * @author vlan
+ */
+public class PyProcessCancelledException extends PyExternalProcessException {
+  public PyProcessCancelledException(@NotNull String name, @NotNull List<String> args) {
+    super(255, name, args, "Process cancelled");
+  }
+}
diff --git a/python/src/com/jetbrains/python/packaging/PyPackageManagerImpl.java b/python/src/com/jetbrains/python/packaging/PyPackageManagerImpl.java
index 9b5f669168f7..b9fc6889f715 100644
--- a/python/src/com/jetbrains/python/packaging/PyPackageManagerImpl.java
+++ b/python/src/com/jetbrains/python/packaging/PyPackageManagerImpl.java
@@ -17,12 +17,15 @@ package com.jetbrains.python.packaging;
 
 import com.google.common.collect.Lists;
 import com.intellij.execution.ExecutionException;
+import com.intellij.execution.process.CapturingProcessHandler;
 import com.intellij.execution.process.ProcessOutput;
 import com.intellij.execution.util.ExecUtil;
 import com.intellij.openapi.application.Application;
 import com.intellij.openapi.application.ApplicationManager;
 import com.intellij.openapi.diagnostic.Logger;
 import com.intellij.openapi.module.Module;
+import com.intellij.openapi.progress.ProgressIndicator;
+import com.intellij.openapi.progress.ProgressManager;
 import com.intellij.openapi.projectRoots.Sdk;
 import com.intellij.openapi.projectRoots.impl.ProjectJdkImpl;
 import com.intellij.openapi.roots.OrderRootType;
@@ -35,7 +38,6 @@ import com.intellij.openapi.vfs.VirtualFile;
 import com.intellij.openapi.vfs.VirtualFileManager;
 import com.intellij.openapi.vfs.newvfs.BulkFileListener;
 import com.intellij.openapi.vfs.newvfs.events.VFileEvent;
-import com.intellij.util.ArrayUtil;
 import com.intellij.util.containers.HashSet;
 import com.intellij.util.messages.MessageBusConnection;
 import com.intellij.util.net.HttpConfigurable;
@@ -469,36 +471,53 @@ public class PyPackageManagerImpl extends PyPackageManager {
     LOG.info("Running packaging tool: " + StringUtil.join(cmdline, " "));
 
     final boolean canCreate = FileUtil.ensureCanCreateFile(new File(homePath));
-    if (!canCreate && !SystemInfo.isWindows && askForSudo) {   //is system site interpreter --> we need sudo privileges
-      try {
-        final ProcessOutput result = ExecUtil.sudoAndGetOutput(cmdline,
-                                                               "Please enter your password to make changes in system packages: ",
-                                                               workingDir);
-        String message = result.getStderr();
-        if (result.getExitCode() != 0) {
-          final String stdout = result.getStdout();
-          if (StringUtil.isEmptyOrSpaces(message)) {
-            message = stdout;
-          }
-          if (StringUtil.isEmptyOrSpaces(message)) {
-            message = "Failed to perform action. Permission denied.";
-          }
-          throw new PyExternalProcessException(result.getExitCode(), helperPath, args, message);
+    final boolean useSudo = !canCreate && !SystemInfo.isWindows && askForSudo;
+
+    try {
+      final Process process;
+      if (useSudo) {
+        process = ExecUtil.sudo(cmdline, "Please enter your password to make changes in system packages: ", workingDir, null);
+      }
+      else {
+        process = ExecUtil.exec(cmdline, workingDir, null);
+      }
+      final CapturingProcessHandler handler = new CapturingProcessHandler(process);
+      // Make the progress indicator an explicit parameter?
+      final ProgressIndicator indicator = ProgressManager.getInstance().getProgressIndicator();
+      final ProcessOutput result;
+      if (indicator != null) {
+        result = handler.runProcessWithProgressIndicator(indicator);
+      }
+      else {
+        result = handler.runProcess(TIMEOUT);
+      }
+      if (result.isCancelled()) {
+        throw new PyProcessCancelledException(helperPath, args);
+      }
+      String message = result.getStderr();
+      if (result.getExitCode() != 0) {
+        final String stdout = result.getStdout();
+        if (StringUtil.isEmptyOrSpaces(message)) {
+          message = stdout;
         }
-        if (SystemInfo.isMac && !StringUtil.isEmptyOrSpaces(message)) {
-          throw new PyExternalProcessException(result.getExitCode(), helperPath, args, message);
+        if (StringUtil.isEmptyOrSpaces(message)) {
+          message = "Failed to perform action. Permission denied.";
         }
-        return result;
+        throw new PyExternalProcessException(result.getExitCode(), helperPath, args, message);
       }
-      catch (ExecutionException e) {
-        throw new PyExternalProcessException(ERROR_EXECUTION, helperPath, args, e.getMessage());
-      }
-      catch (IOException e) {
-        throw new PyExternalProcessException(ERROR_ACCESS_DENIED, helperPath, args, e.getMessage());
+      if (SystemInfo.isMac && !StringUtil.isEmptyOrSpaces(message)) {
+        throw new PyExternalProcessException(result.getExitCode(), helperPath, args, message);
       }
+      return result;
     }
-    else {
-      return PySdkUtil.getProcessOutput(workingDir, ArrayUtil.toStringArray(cmdline), TIMEOUT);
+    catch (PyProcessCancelledException e) {
+      throw e;
+    }
+    catch (ExecutionException e) {
+      throw new PyExternalProcessException(ERROR_EXECUTION, helperPath, args, e.getMessage());
+    }
+    catch (IOException e) {
+      throw new PyExternalProcessException(ERROR_ACCESS_DENIED, helperPath, args, e.getMessage());
     }
   }
 
diff --git a/python/src/com/jetbrains/python/packaging/PyPackageManagerUI.java b/python/src/com/jetbrains/python/packaging/PyPackageManagerUI.java
index 28dfa6c834a4..c263432680ca 100644
--- a/python/src/com/jetbrains/python/packaging/PyPackageManagerUI.java
+++ b/python/src/com/jetbrains/python/packaging/PyPackageManagerUI.java
@@ -181,7 +181,7 @@ public class PyPackageManagerUI {
         notificationRef.set(new Notification(PACKAGING_GROUP_ID, getSuccessTitle(), getSuccessDescription(),
                                              NotificationType.INFORMATION));
       }
-      else {
+      else if (!isCancelled(exceptions)) {
         final String firstLine = getTitle() + ": error occurred.";
         final String description = createDescription(exceptions, firstLine);
         notificationRef.set(new Notification(PACKAGING_GROUP_ID, getFailureTitle(),
@@ -210,6 +210,15 @@ public class PyPackageManagerUI {
         }
       });
     }
+
+    private static boolean isCancelled(@NotNull List<PyExternalProcessException> exceptions) {
+      for (PyExternalProcessException e : exceptions) {
+        if (e instanceof PyProcessCancelledException) {
+          return true;
+        }
+      }
+      return false;
+    }
   }
 
   private static class InstallTask extends PackagingTask {
@@ -241,6 +250,10 @@ public class PyPackageManagerUI {
         try {
           manager.install(Arrays.asList(requirement), myExtraArgs);
         }
+        catch (PyProcessCancelledException e) {
+          exceptions.add(e);
+          break;
+        }
         catch (PyExternalProcessException e) {
           exceptions.add(e);
         }