diff --git a/src/AddIns/BackendBindings/Python/PythonBinding/Project/Src/PythonDesignerGenerator.cs b/src/AddIns/BackendBindings/Python/PythonBinding/Project/Src/PythonDesignerGenerator.cs
index e3ebed2942..ffaa639da5 100644
--- a/src/AddIns/BackendBindings/Python/PythonBinding/Project/Src/PythonDesignerGenerator.cs
+++ b/src/AddIns/BackendBindings/Python/PythonBinding/Project/Src/PythonDesignerGenerator.cs
@@ -132,7 +132,7 @@ namespace ICSharpCode.PythonBinding
 				// Insert the event handler at the end of the class with an extra 
 				// new line before it.
 				IDocument doc = viewContent.DesignerCodeFileDocument;
-				string eventHandler = CreateEventHandler(eventMethodName, body, "\t");
+				string eventHandler = CreateEventHandler(eventMethodName, body, NRefactoryToPythonConverter.GetIndentString(textEditorProperties));
 				int line = doc.LineSegmentCollection.Count;
 				LineSegment lastLineSegment = doc.GetLineSegment(line - 1);
 				int offset = lastLineSegment.Offset + lastLineSegment.Length;
@@ -229,6 +229,7 @@ namespace ICSharpCode.PythonBinding
 		/// <summary>
 		/// Returns the generated event handler.
 		/// </summary>
+		/// <param name="indentation">The indent string to use for the event handler.</param>
 		protected string CreateEventHandler(string eventMethodName, string body, string indentation)
 		{			
 			if (String.IsNullOrEmpty(body)) {
@@ -241,9 +242,9 @@ namespace ICSharpCode.PythonBinding
 			eventHandler.Append("def ");
 			eventHandler.Append(eventMethodName);
 			eventHandler.Append("(self, sender, e):");
-			eventHandler.AppendLine();
+			eventHandler.AppendLine();			
 			eventHandler.Append(indentation);
-			eventHandler.Append("\t");
+			eventHandler.Append(NRefactoryToPythonConverter.GetIndentString(textEditorProperties));
 			eventHandler.Append(body);
 			
 			return eventHandler.ToString();
diff --git a/src/AddIns/BackendBindings/Python/PythonBinding/Test/Designer/InsertEventHandlerTestFixtureBase.cs b/src/AddIns/BackendBindings/Python/PythonBinding/Test/Designer/InsertEventHandlerTestFixtureBase.cs
index e94e73a310..431477ac55 100644
--- a/src/AddIns/BackendBindings/Python/PythonBinding/Test/Designer/InsertEventHandlerTestFixtureBase.cs
+++ b/src/AddIns/BackendBindings/Python/PythonBinding/Test/Designer/InsertEventHandlerTestFixtureBase.cs
@@ -26,11 +26,13 @@ namespace PythonBinding.Tests.Designer
 		protected DerivedFormDesignerViewContent viewContent;
 		protected string fileName = @"C:\Projects\Python\mainform.py";
 		protected DerivedPythonDesignerGenerator generator;
+		protected MockTextEditorProperties textEditorProperties;
 
 		[TestFixtureSetUp]
 		public void SetUpFixture()
 		{
-			generator = new DerivedPythonDesignerGenerator();
+			textEditorProperties = new MockTextEditorProperties();
+			generator = new DerivedPythonDesignerGenerator(textEditorProperties);
 			mockViewContent = new MockTextEditorViewContent();
 			viewContent = new DerivedFormDesignerViewContent(mockViewContent, new MockOpenedFile(fileName));
 			generator.Attach(viewContent);
diff --git a/src/AddIns/BackendBindings/Python/PythonBinding/Test/Designer/InsertEventHandlerWithSpaceIndentTestFixture.cs b/src/AddIns/BackendBindings/Python/PythonBinding/Test/Designer/InsertEventHandlerWithSpaceIndentTestFixture.cs
new file mode 100644
index 0000000000..57c603284d
--- /dev/null
+++ b/src/AddIns/BackendBindings/Python/PythonBinding/Test/Designer/InsertEventHandlerWithSpaceIndentTestFixture.cs
@@ -0,0 +1,65 @@
+// <file>
+//     <copyright see="prj:///doc/copyright.txt"/>
+//     <license see="prj:///doc/license.txt"/>
+//     <owner name="Matthew Ward" email="mrward@users.sourceforge.net"/>
+//     <version>$Revision$</version>
+// </file>
+
+using System;
+using ICSharpCode.PythonBinding;
+using ICSharpCode.FormsDesigner;
+using ICSharpCode.SharpDevelop.Dom;
+using NUnit.Framework;
+using PythonBinding.Tests.Utils;
+
+namespace PythonBinding.Tests.Designer
+{
+	/// <summary>
+	/// Tests the PythonDesignerGenerator uses the text editor properties for indentation when
+	/// inserting an event handler into the document.
+	/// </summary>
+	[TestFixture]
+	public class InsertEventHandlerWithSpaceIndentTestFixture : InsertEventHandlerTestFixtureBase
+	{
+		public override void AfterSetUpFixture()
+		{
+			textEditorProperties.ConvertTabsToSpaces = true;
+			textEditorProperties.IndentationSize = 4;
+			MockEventDescriptor mockEventDescriptor = new MockEventDescriptor("Click");
+			insertedEventHandler = generator.InsertComponentEvent(null, mockEventDescriptor, "button1_click", String.Empty, out file, out position);
+		}
+		
+		[Test]
+		public void ExpectedCodeAfterEventHandlerInserted()
+		{
+			string expectedCode = GetTextEditorCode();			
+			string eventHandler = "    def button1_click(self, sender, e):\r\n" +
+								"        pass";
+			expectedCode = expectedCode + "\r\n" + eventHandler;
+			
+			Assert.AreEqual(expectedCode, viewContent.DesignerCodeFileContent);
+		}
+		
+		/// <summary>
+		/// Note that the text editor code already has the
+		/// statement: 
+		/// 
+		/// "self._button1.Click += button1_click"
+		/// 
+		/// This is generated by the form designer framework and not
+		/// by the designer generator.
+		/// </summary>
+		protected override string GetTextEditorCode()
+		{
+			return "from System.Windows.Forms import Form\r\n" +
+					"\r\n" +
+					"class MainForm(Form):\r\n" +
+					"    def __init__(self):\r\n" +
+					"        self.InitializeComponents()\r\n" +
+					"    \r\n" +
+					"    def InitializeComponents(self):\r\n" +
+					"        self._button1 = System.Windows.Forms.Button()\r\n" +
+					"        self.Controls.Add(self._button1)\r\n";
+		}
+	}
+}
diff --git a/src/AddIns/BackendBindings/Python/PythonBinding/Test/PythonBinding.Tests.csproj b/src/AddIns/BackendBindings/Python/PythonBinding/Test/PythonBinding.Tests.csproj
index de16d4dc5d..cbba547df8 100644
--- a/src/AddIns/BackendBindings/Python/PythonBinding/Test/PythonBinding.Tests.csproj
+++ b/src/AddIns/BackendBindings/Python/PythonBinding/Test/PythonBinding.Tests.csproj
@@ -232,6 +232,7 @@
     <Compile Include="Designer\GetResourcesFromDesignerLoaderTestFixture.cs" />
     <Compile Include="Designer\IgnoreDesignTimePropertiesTestFixture.cs" />
     <Compile Include="Designer\InsertEventHandlerTestFixtureBase.cs" />
+    <Compile Include="Designer\InsertEventHandlerWithSpaceIndentTestFixture.cs" />
     <Compile Include="Designer\InsertNewEventHandlerTestFixture.cs" />
     <Compile Include="Designer\InsertSecondEventHandlerTestFixture.cs" />
     <Compile Include="Designer\IsFullyQualifiedBaseClassFormDesignableTestFixture.cs" />