diff --git a/java/java-impl/src/com/intellij/codeInsight/completion/JavaKeywordCompletion.java b/java/java-impl/src/com/intellij/codeInsight/completion/JavaKeywordCompletion.java
index ca9a446fa1da..183d08a44e6f 100644
--- a/java/java-impl/src/com/intellij/codeInsight/completion/JavaKeywordCompletion.java
+++ b/java/java-impl/src/com/intellij/codeInsight/completion/JavaKeywordCompletion.java
@@ -479,11 +479,11 @@ public class JavaKeywordCompletion {
         addKeyword(new OverridableSpace(createKeyword(s), TailType.HUMBLE_SPACE_BEFORE_WORD));
       }
 
-      PsiExpression expression = PsiTreeUtil.getParentOfType(myPosition, PsiExpression.class, true, PsiMember.class);
-      if (expression != null && expression.getParent() instanceof PsiExpressionStatement) {
+      if (psiElement().insideStarting(psiElement(PsiLocalVariable.class, PsiExpressionStatement.class)).accepts(myPosition)) {
         addKeyword(new OverridableSpace(createKeyword(PsiKeyword.CLASS), TailType.HUMBLE_SPACE_BEFORE_WORD));
       }
-      if (expression == null && PsiTreeUtil.getParentOfType(myPosition, PsiCodeBlock.class, true, PsiMember.class) == null) {
+      if (PsiTreeUtil.getParentOfType(myPosition, PsiExpression.class, true, PsiMember.class) == null && 
+          PsiTreeUtil.getParentOfType(myPosition, PsiCodeBlock.class, true, PsiMember.class) == null) {
         addKeyword(new OverridableSpace(createKeyword(PsiKeyword.CLASS), TailType.HUMBLE_SPACE_BEFORE_WORD));
         addKeyword(new OverridableSpace(createKeyword(PsiKeyword.INTERFACE), TailType.HUMBLE_SPACE_BEFORE_WORD));
         if (PsiUtil.isLanguageLevel5OrHigher(myPosition)) {
diff --git a/java/java-tests/testData/codeInsight/completion/keywords/classInMethodOvertype.java b/java/java-tests/testData/codeInsight/completion/keywords/classInMethodOvertype.java
new file mode 100644
index 000000000000..dd3ed618bff3
--- /dev/null
+++ b/java/java-tests/testData/codeInsight/completion/keywords/classInMethodOvertype.java
@@ -0,0 +1,6 @@
+public class Util {
+  void foo() {
+    c<caret>lass InnerTest {
+    }
+  }
+}
diff --git a/java/java-tests/testSrc/com/intellij/java/codeInsight/completion/KeywordCompletionTest.java b/java/java-tests/testSrc/com/intellij/java/codeInsight/completion/KeywordCompletionTest.java
index b401dbe1c37f..8698c63bc0a7 100644
--- a/java/java-tests/testSrc/com/intellij/java/codeInsight/completion/KeywordCompletionTest.java
+++ b/java/java-tests/testSrc/com/intellij/java/codeInsight/completion/KeywordCompletionTest.java
@@ -147,6 +147,7 @@ public class KeywordCompletionTest extends LightCompletionTestCase {
   public void testFinalInLambda() { doTest(2, "final", "float"); }
   public void testNoFinalAfterTryBody() { doTest(1, "final", "finally"); }
   public void testClassInMethod() { doTest(2, "class", "char"); }
+  public void testClassInMethodOvertype() { doTest(2, "class", "char"); }
   public void testIntInClassArray() { doTest(2, "int", "char", "final"); }
   public void testIntInClassArray2() { doTest(2, "int", "char", "final"); }
   public void testIntInClassArray3() { doTest(2, "int", "char", "final"); }