diff --git a/platform/lang-impl/src/com/intellij/ide/fileTemplates/FileTemplateUtil.java b/platform/lang-impl/src/com/intellij/ide/fileTemplates/FileTemplateUtil.java
index b2e21797a8d6..0279c2f74cd5 100644
--- a/platform/lang-impl/src/com/intellij/ide/fileTemplates/FileTemplateUtil.java
+++ b/platform/lang-impl/src/com/intellij/ide/fileTemplates/FileTemplateUtil.java
@@ -199,13 +199,6 @@ public class FileTemplateUtil{
     return stringWriter.toString();
   }
 
-  public static void copyTemplate(FileTemplate from, FileTemplate to){
-    to.setExtension(from.getExtension());
-    to.setName(from.getName());
-    to.setText(from.getText());
-    to.setReformatCode(from.isReformatCode());
-  }
-
   @SuppressWarnings({"HardCodedStringLiteral"})
   private static synchronized void initVelocity(){
     try{
diff --git a/platform/lang-impl/src/com/intellij/ide/fileTemplates/impl/FTManager.java b/platform/lang-impl/src/com/intellij/ide/fileTemplates/impl/FTManager.java
index aaea2e71518c..51b5696aa02e 100644
--- a/platform/lang-impl/src/com/intellij/ide/fileTemplates/impl/FTManager.java
+++ b/platform/lang-impl/src/com/intellij/ide/fileTemplates/impl/FTManager.java
@@ -168,6 +168,8 @@ class FTManager {
       _template.setText(template.getText());
       _template.setReformatCode(template.isReformatCode());
     }
+    // Important! Must update template files on disk so that Velocity is able to use them
+    saveTemplates();
   }
   
   public void addDefaultTemplate(DefaultTemplate template) {
@@ -185,72 +187,6 @@ class FTManager {
     return bundled;
   }
 
-  // synchronizes templates: merges user-defined templates with default templates from the same category
-  //private void loadTemplates() {
-  //  final File configRoot = getConfigRoot(false);
-  //  File[] configFiles = configRoot.listFiles();
-  //  if (configFiles == null) {
-  //    configFiles = ArrayUtil.EMPTY_FILE_ARRAY;
-  //  }
-  //
-  //  final List<FileTemplate> existingTemplates = new ArrayList<FileTemplate>();
-  //  // Read user-defined templates
-  //  for (File file : configFiles) {
-  //    if (file.isDirectory() || myTypeManager.isFileIgnored(file.getName()) || file.isHidden()) {
-  //      continue;
-  //    }
-  //    String name = file.getName();
-  //    final String extension = myTypeManager.getExtension(name);
-  //    name = name.substring(0, name.length() - extension.length() - 1);
-  //    if (name.length() == 0) {
-  //      continue;
-  //    }
-  //    final FileTemplate existing = myTemplates.findByName(name);
-  //    if (existing == null || existing.isDefault()) {
-  //      if (existing != null) {
-  //        myTemplates.removeTemplate(existing);
-  //      }
-  //      FileTemplateImpl fileTemplate = new FileTemplateImpl(file, name, extension, false);
-  //      myTemplates.addTemplate(fileTemplate);
-  //      existingTemplates.add(fileTemplate);
-  //    }
-  //    else {
-  //      // it is a user-defined template, revalidate it
-  //      LOG.assertTrue(!((FileTemplateImpl)existing).isModified());
-  //      ((FileTemplateImpl)existing).invalidate();
-  //      existingTemplates.add(existing);
-  //    }
-  //  }
-  //
-  //  for (final DefaultTemplate defaultTemplate : getDefaultTemplates()) {
-  //    final String name = defaultTemplate.getName();
-  //    final FileTemplate template = myTemplates.findByName(name);
-  //    if (template == null) {
-  //      final FileTemplateImpl _template = new FileTemplateImpl(defaultTemplate.getTemplateURL(), defaultTemplate.getName(), defaultTemplate.getExtension());
-  //      _template.setDescription(defaultTemplate.getDescriptionURL());
-  //      myTemplates.addTemplate(_template);
-  //    }
-  //  }
-  //  
-  //  List<FileTemplateImpl> toRemove = null;
-  //  for (FileTemplate template : myTemplates.getAllTemplates()) {
-  //    final FileTemplateImpl templateImpl = (FileTemplateImpl)template;
-  //    if (!templateImpl.isDefault() && !existingTemplates.contains(templateImpl) && !templateImpl.isNew()) {
-  //      if (toRemove == null) {
-  //        toRemove = new ArrayList<FileTemplateImpl>();
-  //      }
-  //      toRemove.add(templateImpl);
-  //    }
-  //  }
-  //  
-  //  if (toRemove != null) {
-  //    for (FileTemplateImpl template : toRemove) {
-  //      myTemplates.removeTemplate(template);
-  //      template.removeFromDisk();
-  //    }
-  //  }
-  //}
-
   void saveTemplates() {
     try {
       final File configRoot = getConfigRoot(true);
@@ -259,9 +195,7 @@ class FTManager {
       final File[] files = configRoot.listFiles();
       if (files != null) {
         for (File file : files) {
-          if (file.getName().endsWith(TEMPLATE_EXTENSION_SUFFIX)) {
-            FileUtil.delete(file);
-          }
+          FileUtil.delete(file);
         }
       }
 
@@ -283,7 +217,7 @@ class FTManager {
    *  todo: review saving algorithm
    */
   private static void saveTemplate(File parentDir, FileTemplateBase template, final String lineSeparator) throws IOException {
-    final File templateFile = new File(parentDir, template.getName() + "." + template.getExtension() + TEMPLATE_EXTENSION_SUFFIX);
+    final File templateFile = new File(parentDir, template.getName() + "." + template.getExtension());
 
     FileOutputStream fileOutputStream = new FileOutputStream(templateFile);
     OutputStreamWriter outputStreamWriter;
diff --git a/platform/lang-impl/src/com/intellij/ide/fileTemplates/impl/FileTemplateManagerImpl.java b/platform/lang-impl/src/com/intellij/ide/fileTemplates/impl/FileTemplateManagerImpl.java
index 5076f42beafd..7af76830d2ad 100644
--- a/platform/lang-impl/src/com/intellij/ide/fileTemplates/impl/FileTemplateManagerImpl.java
+++ b/platform/lang-impl/src/com/intellij/ide/fileTemplates/impl/FileTemplateManagerImpl.java
@@ -35,7 +35,6 @@ import com.intellij.openapi.util.*;
 import com.intellij.openapi.util.io.FileUtil;
 import com.intellij.openapi.util.text.StringUtil;
 import com.intellij.util.SystemProperties;
-import com.intellij.util.messages.MessageBus;
 import com.intellij.util.text.DateFormatUtil;
 import org.jdom.Element;
 import org.jetbrains.annotations.NonNls;
@@ -199,31 +198,32 @@ public class FileTemplateManagerImpl extends FileTemplateManager implements Expo
       return;
     }
 
-    final List<File> oldFormatTemplates = new ArrayList<File>();
+    final List<File> templateWithDefaultExtension = new ArrayList<File>();
     final Set<String> processedNames = new HashSet<String>();
 
     for (File file : configFiles) {
       if (file.isDirectory() || myTypeManager.isFileIgnored(file.getName()) || file.isHidden()) {
         continue;
       }
-      String name = file.getName();
-      if (!name.endsWith(FTManager.TEMPLATE_EXTENSION_SUFFIX)) {
-        oldFormatTemplates.add(file);
-        continue;
+      final String name = file.getName();
+      if (name.endsWith(FTManager.TEMPLATE_EXTENSION_SUFFIX)) {
+        templateWithDefaultExtension.add(file);
+      }
+      else {
+        processedNames.add(name);
+        addTemplateFromFile(manager, name, file);
       }
-      // cut default template extension
-      name = name.substring(0, name.length() - FTManager.TEMPLATE_EXTENSION_SUFFIX.length());
-      processedNames.add(name);
 
-      addTemplateFromFile(manager, name, file);
     }
 
-    for (File oldFile : oldFormatTemplates) {
-      final String name = oldFile.getName();
+    for (File file : templateWithDefaultExtension) {
+      String name = file.getName();
+      // cut default template extension
+      name = name.substring(0, name.length() - FTManager.TEMPLATE_EXTENSION_SUFFIX.length());
       if (!processedNames.contains(name)) {
-        addTemplateFromFile(manager, name, oldFile);
+        addTemplateFromFile(manager, name, file);
       }
-      FileUtil.delete(oldFile);
+      FileUtil.delete(file);
     }
   }
 
@@ -554,6 +554,8 @@ public class FileTemplateManagerImpl extends FileTemplateManager implements Expo
         final String text = normalizeText(getDefaultClassTemplateText(templateName));
         template = myInternalTemplatesManager.addTemplate(templateName, "java");
         template.setText(text);
+        // Important! Must update template files on disk so that Velocity is able to use them
+        myInternalTemplatesManager.saveTemplates();
       }
     }
     return template;