diff --git a/gcc/cp/ChangeLog b/gcc/cp/ChangeLog
index c5d0c9516d9..053c227cf62 100644
--- a/gcc/cp/ChangeLog
+++ b/gcc/cp/ChangeLog
@@ -1,3 +1,13 @@
+2001-03-01  Nathan Sidwell  <nathan@codesourcery.com>
+
+	Implement using decls inside template functions.
+	* decl2.c (validate_nonmember_using_decl): Don't special case
+	fake_std_node in the global namespace. Don't reject early when
+	processing a template.
+	(do_local_using_decl): Add to statement tree. Don't do further
+	processing when building a template.
+	* pt.c (tsubst_expr, DECL_STMT case): Deal with USING_DECLs.
+
 2001-03-01  Nathan Sidwell  <nathan@codesourcery.com>
 
 	* decl2.c (do_nonmember_using_decl): Don't complain if we find
diff --git a/gcc/cp/decl2.c b/gcc/cp/decl2.c
index d115dccdeee..000eb78ee6a 100644
--- a/gcc/cp/decl2.c
+++ b/gcc/cp/decl2.c
@@ -5032,16 +5032,6 @@ validate_nonmember_using_decl (decl, scope, name)
   if (TREE_CODE (decl) == SCOPE_REF
       && TREE_OPERAND (decl, 0) == fake_std_node)
     {
-      if (namespace_bindings_p ()
-	  && current_namespace == global_namespace)
-	/* There's no need for a using declaration at all, here,
-	   since `std' is the same as `::'.  We can't just pass this
-	   on because we'll complain later about declaring something
-	   in the same scope as a using declaration with the same
-	   name.  We return NULL_TREE which indicates to the caller
-	   that there's no need to do any further processing.  */
-	return NULL_TREE;
-
       *scope = global_namespace;
       *name = TREE_OPERAND (decl, 1);
     }
@@ -5054,7 +5044,8 @@ validate_nonmember_using_decl (decl, scope, name)
 
 	 A using-declaration for a class member shall be a
 	 member-declaration.  */
-      if (TREE_CODE (*scope) != NAMESPACE_DECL)
+      if (!processing_template_decl
+          && TREE_CODE (*scope) != NAMESPACE_DECL)
 	{
 	  if (TYPE_P (*scope))
 	    cp_error ("`%T' is not a namespace", *scope);
@@ -5212,6 +5203,12 @@ do_local_using_decl (decl)
   if (decl == NULL_TREE)
     return;
 
+  if (building_stmt_tree ()
+      && at_function_scope_p ())
+    add_decl_stmt (decl);
+  if (processing_template_decl)
+    return;
+
   oldval = lookup_name_current_level (name);
   oldtype = lookup_type_current_level (name);
 
diff --git a/gcc/cp/pt.c b/gcc/cp/pt.c
index 331b307dc3d..0994d670cc8 100644
--- a/gcc/cp/pt.c
+++ b/gcc/cp/pt.c
@@ -7299,6 +7299,14 @@ tsubst_expr (t, args, complain, in_decl)
 	decl = DECL_STMT_DECL (t);
 	if (TREE_CODE (decl) == LABEL_DECL)
 	  finish_label_decl (DECL_NAME (decl));
+	else if (TREE_CODE (decl) == USING_DECL)
+	  {
+	    tree scope = DECL_INITIAL (decl);
+	    tree name = DECL_NAME (decl);
+	    
+	    scope = tsubst_expr (scope, args, complain, in_decl);
+	    do_local_using_decl (build_nt (SCOPE_REF, scope, name));
+	  }
 	else
 	  {
 	    init = DECL_INITIAL (decl);
diff --git a/gcc/testsuite/ChangeLog b/gcc/testsuite/ChangeLog
index 414c253c948..0a1a3ecaf40 100644
--- a/gcc/testsuite/ChangeLog
+++ b/gcc/testsuite/ChangeLog
@@ -1,3 +1,7 @@
+2001-03-01  Nathan Sidwell  <nathan@codesourcery.com>
+
+	* g++.old-deja/g++.pt/using1.C: New test.
+
 2001-03-01  Nathan Sidwell  <nathan@codesourcery.com>
 
 	* g++.old-deja/g++.other/using9.C: New test.
diff --git a/gcc/testsuite/g++.old-deja/g++.pt/using1.C b/gcc/testsuite/g++.old-deja/g++.pt/using1.C
new file mode 100644
index 00000000000..eca6c501214
--- /dev/null
+++ b/gcc/testsuite/g++.old-deja/g++.pt/using1.C
@@ -0,0 +1,36 @@
+// Copyright (C) 2001 Free Software Foundation, Inc.
+// Contributed by Nathan Sidwell 26 Feb 2001 <nathan@codesourcery.com>
+
+// Bug 1981. using declarations in namespace scope were not remembered.
+
+namespace A
+{
+  void swap () {}
+};
+
+template <class T> void f()
+{
+  using A::swap;
+}
+
+template void f<float> ();
+
+namespace B
+{
+  int foo (int) { return 1;}
+  
+  template <class T> int baz ()
+  {
+    using ::foo;
+    
+    return foo (1);
+  }
+  template int baz<float> ();
+};
+
+int foo (int) { return 0;}
+
+int main ()
+{
+  return B::baz<float> ();
+}