diff --git a/src/AddIns/BackendBindings/Python/PythonBinding/Project/Src/PythonForm.cs b/src/AddIns/BackendBindings/Python/PythonBinding/Project/Src/PythonForm.cs
index 5f966503a9..29aa7a690e 100644
--- a/src/AddIns/BackendBindings/Python/PythonBinding/Project/Src/PythonForm.cs
+++ b/src/AddIns/BackendBindings/Python/PythonBinding/Project/Src/PythonForm.cs
@@ -83,13 +83,13 @@ namespace ICSharpCode.PythonBinding
 		}
 		
 		void GenerateInitializeComponentMethodBodyInternal(Form form)
-		{			
-			foreach (Control control in form.Controls) {
-				AppendControlCreation(control);
-			}
+		{
+			AppendChildControlCreation(form.Controls);
+			AppendChildControlSuspendLayout(form.Controls);
 
 			AppendIndentedLine("self.SuspendLayout()");
 			AppendForm(form);			
+			AppendChildControlResumeLayout(form.Controls);
 			AppendIndentedLine("self.ResumeLayout(False)");
 			AppendIndentedLine("self.PerformLayout()");
 		}
@@ -99,30 +99,24 @@ namespace ICSharpCode.PythonBinding
 		/// </summary>
 		void AppendForm(Form form)
 		{
-			
 			// Add the controls on the form.
 			foreach (Control control in form.Controls) {
 				AppendControl(control);
 			}
 			
 			// Add form.
-			AppendControl(form, false);
-			
-			// Add controls to form.
-			foreach (Control control in form.Controls) {
-				AppendIndentedLine("self.Controls.Add(self." + control.Name + ")");
-			}
+			AppendControl(form, false, false);
 		}
 
 		void AppendControl(Control control)
 		{
-			AppendControl(control, true);
+			AppendControl(control, true, true);
 		}
 		
 		/// <summary>
 		/// Generates python code for the control.
 		/// </summary>
-		void AppendControl(Control control, bool addControlNameToProperty)
+		void AppendControl(Control control, bool addControlNameToProperty, bool addChildControlProperties)
 		{
 			AppendComment(control.Name);
 
@@ -134,6 +128,16 @@ namespace ICSharpCode.PythonBinding
 			foreach (PropertyDescriptor property in GetSerializableProperties(control)) {
 				AppendProperty(propertyOwnerName, control, property);
 			}
+			
+			foreach (Control childControl in control.Controls) {
+				AppendIndentedLine(GetPropertyName(propertyOwnerName, "Controls") + ".Add(self._" + childControl.Name + ")");
+			}
+	
+			if (addChildControlProperties) {
+				foreach (Control childControl in control.Controls) {
+					AppendControl(childControl, true, true);
+				}
+			}
 		}
 		
 		/// <summary>
@@ -199,9 +203,39 @@ namespace ICSharpCode.PythonBinding
 			codeBuilder.Append(text);
 		}
 		
+		void AppendChildControlCreation(Control.ControlCollection controls)
+		{
+			foreach (Control control in controls) {
+				AppendControlCreation(control);
+				AppendChildControlCreation(control.Controls);
+			}
+		}
+		
 		void AppendControlCreation(Control control)
 		{
-			AppendIndentedLine("self._" + control.Name + " = " + control.GetType().FullName + "()");			
+			AppendIndentedLine("self._" + control.Name + " = " + control.GetType().FullName + "()");
+		}
+		
+		void AppendChildControlSuspendLayout(Control.ControlCollection controls)
+		{
+			AppendChildControlLayoutMethodCalls(controls, new string[] {"SuspendLayout()"});
+		}
+		
+		void AppendChildControlResumeLayout(Control.ControlCollection controls)
+		{
+			AppendChildControlLayoutMethodCalls(controls, new string[] {"ResumeLayout(false)", "PerformLayout()"});
+		}
+	
+		
+		void AppendChildControlLayoutMethodCalls(Control.ControlCollection controls, string[] methods)
+		{
+			foreach (Control control in controls) {
+				if (control.Controls.Count > 0) {
+					foreach (string method in methods) {
+						AppendIndentedLine("self._" + control.Name + "." + method);
+					}
+				}
+			}
 		}
 	}
 }
diff --git a/src/AddIns/BackendBindings/Python/PythonBinding/Test/Designer/GeneratePanelFormTestFixture.cs b/src/AddIns/BackendBindings/Python/PythonBinding/Test/Designer/GeneratePanelFormTestFixture.cs
new file mode 100644
index 0000000000..96d9ec6aff
--- /dev/null
+++ b/src/AddIns/BackendBindings/Python/PythonBinding/Test/Designer/GeneratePanelFormTestFixture.cs
@@ -0,0 +1,87 @@
+// <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 System.Drawing;
+using System.Windows.Forms;
+using ICSharpCode.PythonBinding;
+using NUnit.Framework;
+using PythonBinding.Tests.Utils;
+
+namespace PythonBinding.Tests.Designer
+{
+	[TestFixture]
+	public class GeneratePanelFormTestFixture
+	{
+		string generatedPythonCode;
+		
+		[TestFixtureSetUp]
+		public void SetUpFixture()
+		{
+			using (Form form = new Form()) {
+				form.Name = "MainForm";
+				form.ClientSize = new Size(284, 264);
+				
+				Panel panel = new Panel();
+				panel.Location = new Point(10, 15);
+				panel.Name = "panel1";
+				panel.TabIndex = 0;
+				panel.Size = new Size(100, 120);
+				TextBox textBox = new TextBox();
+				textBox.Location = new Point(5, 5);
+				textBox.Name = "textBox1";
+				textBox.TabIndex = 0;
+				textBox.Size = new Size(110, 20);
+				panel.Controls.Add(textBox);
+				
+				form.Controls.Add(panel);
+				
+				string indentString = "    ";
+				PythonForm pythonForm = new PythonForm(indentString);
+				generatedPythonCode = pythonForm.GenerateInitializeComponentMethod(form);
+			}
+		}
+		
+		[Test]
+		public void GeneratedCode()
+		{
+			string expectedCode = "def InitializeComponent(self):\r\n" +
+								"    self._panel1 = System.Windows.Forms.Panel()\r\n" +
+								"    self._textBox1 = System.Windows.Forms.TextBox()\r\n" +
+								"    self._panel1.SuspendLayout()\r\n" +
+								"    self.SuspendLayout()\r\n" +
+								"    # \r\n" +
+								"    # panel1\r\n" +
+								"    # \r\n" +
+								"    self._panel1.Location = System.Drawing.Point(10, 15)\r\n" +
+								"    self._panel1.Name = \"panel1\"\r\n" +
+								"    self._panel1.Size = System.Drawing.Size(100, 120)\r\n" +
+								"    self._panel1.TabIndex = 0\r\n" +
+								"    self._panel1.Controls.Add(self._textBox1)\r\n" +
+								"    # \r\n" +
+								"    # textBox1\r\n" +
+								"    # \r\n" +
+								"    self._textBox1.Location = System.Drawing.Point(5, 5)\r\n" +
+								"    self._textBox1.Name = \"textBox1\"\r\n" +
+								"    self._textBox1.Size = System.Drawing.Size(110, 20)\r\n" +
+								"    self._textBox1.TabIndex = 0\r\n" +
+								"    # \r\n" +
+								"    # MainForm\r\n" +
+								"    # \r\n" +
+								"    self.ClientSize = System.Drawing.Size(284, 264)\r\n" +
+								"    self.Name = \"MainForm\"\r\n" +
+								"    self.Visible = False\r\n" +
+								"    self.Controls.Add(self._panel1)\r\n" +
+								"    self._panel1.ResumeLayout(false)\r\n" +
+								"    self._panel1.PerformLayout()\r\n" +
+								"    self.ResumeLayout(False)\r\n" +
+								"    self.PerformLayout()\r\n";
+			
+			Assert.AreEqual(expectedCode, generatedPythonCode);
+		}
+	}
+}
diff --git a/src/AddIns/BackendBindings/Python/PythonBinding/Test/Designer/GenerateTextBoxFormTestFixture.cs b/src/AddIns/BackendBindings/Python/PythonBinding/Test/Designer/GenerateTextBoxFormTestFixture.cs
index 8d89eefafe..51f2db047b 100644
--- a/src/AddIns/BackendBindings/Python/PythonBinding/Test/Designer/GenerateTextBoxFormTestFixture.cs
+++ b/src/AddIns/BackendBindings/Python/PythonBinding/Test/Designer/GenerateTextBoxFormTestFixture.cs
@@ -59,7 +59,7 @@ namespace PythonBinding.Tests.Designer
 								"    self.ClientSize = System.Drawing.Size(284, 264)\r\n" +
 								"    self.Name = \"MainForm\"\r\n" +
 								"    self.Visible = False\r\n" +
-								"    self.Controls.Add(self.textBox1)\r\n" +
+								"    self.Controls.Add(self._textBox1)\r\n" +
 								"    self.ResumeLayout(False)\r\n" +
 								"    self.PerformLayout()\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 e779ba7194..5b7b6f8509 100644
--- a/src/AddIns/BackendBindings/Python/PythonBinding/Test/PythonBinding.Tests.csproj
+++ b/src/AddIns/BackendBindings/Python/PythonBinding/Test/PythonBinding.Tests.csproj
@@ -160,6 +160,7 @@
     <Compile Include="Designer\GenerateFormPaddingTestFixture.cs" />
     <Compile Include="Designer\GenerateImeModeFormTestFixture.cs" />
     <Compile Include="Designer\GenerateMinSizeFormTestFixture.cs" />
+    <Compile Include="Designer\GeneratePanelFormTestFixture.cs" />
     <Compile Include="Designer\GenerateRightToLeftFormTestFixture.cs" />
     <Compile Include="Designer\GenerateSimpleFormTestFixture.cs" />
     <Compile Include="Designer\GenerateTextBoxFormTestFixture.cs" />