diff --git a/mysql-test/r/ps.result b/mysql-test/r/ps.result
index 51fadd48184..5b638fd58ab 100644
--- a/mysql-test/r/ps.result
+++ b/mysql-test/r/ps.result
@@ -499,3 +499,28 @@ SELECT FOUND_ROWS();
 FOUND_ROWS()
 2
 deallocate prepare stmt;
+create table t1 (a char(3) not null, b char(3) not null,
+c char(3) not null, primary key  (a, b, c));
+create table t2 like t1;
+prepare stmt from
+"select t1.a from (t1 left outer join t2 on t2.a=1 and t1.b=t2.b)
+  where t1.a=1";
+execute stmt;
+a
+execute stmt;
+a
+execute stmt;
+a
+prepare stmt from
+"select t1.a, t1.b, t1.c, t2.a, t2.b, t2.c from
+(t1 left outer join t2 on t2.a=? and t1.b=t2.b)
+left outer join t2 t3 on t3.a=? where t1.a=?";
+set @a:=1, @b:=1, @c:=1;
+execute stmt using @a, @b, @c;
+a	b	c	a	b	c
+execute stmt using @a, @b, @c;
+a	b	c	a	b	c
+execute stmt using @a, @b, @c;
+a	b	c	a	b	c
+deallocate prepare stmt;
+drop table t1,t2;
diff --git a/mysql-test/r/sp.result b/mysql-test/r/sp.result
index 24045bae430..803cb89cecf 100644
--- a/mysql-test/r/sp.result
+++ b/mysql-test/r/sp.result
@@ -2542,3 +2542,41 @@ drop procedure bug7992|
 drop table t3|
 drop table t1;
 drop table t2;
+CREATE TABLE t1 (
+lpitnumber int(11) default NULL,
+lrecordtype int(11) default NULL
+);
+CREATE TABLE t2 (
+lbsiid int(11) NOT NULL default '0',
+ltradingmodeid int(11) NOT NULL default '0',
+ltradingareaid int(11) NOT NULL default '0',
+csellingprice decimal(19,4) default NULL,
+PRIMARY KEY  (lbsiid,ltradingmodeid,ltradingareaid)
+);
+CREATE TABLE t3 (
+lbsiid int(11) NOT NULL default '0',
+ltradingareaid int(11) NOT NULL default '0',
+PRIMARY KEY  (lbsiid,ltradingareaid)
+);
+CREATE PROCEDURE bug8849()
+begin
+insert into t3
+(
+t3.lbsiid,
+t3.ltradingareaid
+)
+select distinct t1.lpitnumber, t2.ltradingareaid
+from
+t2 join t1 on
+t1.lpitnumber = t2.lbsiid
+and t1.lrecordtype = 1
+left join t2 as price01 on
+price01.lbsiid = t2.lbsiid and
+price01.ltradingmodeid = 1 and
+t2.ltradingareaid = price01.ltradingareaid;
+end|
+call bug8849();
+call bug8849();
+call bug8849();
+drop procedure bug8849;
+drop tables t1,t2,t3;
diff --git a/mysql-test/t/ps.test b/mysql-test/t/ps.test
index b65226dae6d..1af84119b79 100644
--- a/mysql-test/t/ps.test
+++ b/mysql-test/t/ps.test
@@ -507,3 +507,36 @@ SELECT FOUND_ROWS();
 execute stmt;                                                                   
 SELECT FOUND_ROWS();                                                            
 deallocate prepare stmt;
+
+#
+# Bug#8115: equality propagation and prepared statements
+#
+
+create table t1 (a char(3) not null, b char(3) not null,
+                 c char(3) not null, primary key  (a, b, c));
+create table t2 like t1;
+
+# reduced query
+prepare stmt from
+  "select t1.a from (t1 left outer join t2 on t2.a=1 and t1.b=t2.b)
+  where t1.a=1";
+execute stmt;
+execute stmt;
+execute stmt;
+
+# original query
+prepare stmt from
+"select t1.a, t1.b, t1.c, t2.a, t2.b, t2.c from
+(t1 left outer join t2 on t2.a=? and t1.b=t2.b)
+left outer join t2 t3 on t3.a=? where t1.a=?";
+
+set @a:=1, @b:=1, @c:=1;
+
+execute stmt using @a, @b, @c;
+execute stmt using @a, @b, @c;
+execute stmt using @a, @b, @c;
+
+deallocate prepare stmt;
+
+drop table t1,t2;
+
diff --git a/mysql-test/t/sp.test b/mysql-test/t/sp.test
index 439ace881d1..69bdeb7a059 100644
--- a/mysql-test/t/sp.test
+++ b/mysql-test/t/sp.test
@@ -3086,3 +3086,52 @@ delimiter ;|
 drop table t1;
 drop table t2;
 
+#
+# Bug#8849: rolling back changes to AND/OR structure of ON and WHERE clauses 
+# in SP
+# 
+
+CREATE TABLE t1 (
+  lpitnumber int(11) default NULL,
+  lrecordtype int(11) default NULL
+);
+
+CREATE TABLE t2 (
+  lbsiid int(11) NOT NULL default '0',
+  ltradingmodeid int(11) NOT NULL default '0',
+  ltradingareaid int(11) NOT NULL default '0',
+  csellingprice decimal(19,4) default NULL,
+  PRIMARY KEY  (lbsiid,ltradingmodeid,ltradingareaid)
+);
+
+CREATE TABLE t3 (
+  lbsiid int(11) NOT NULL default '0',
+  ltradingareaid int(11) NOT NULL default '0',
+  PRIMARY KEY  (lbsiid,ltradingareaid)
+);
+
+delimiter |;
+CREATE PROCEDURE bug8849()
+begin
+  insert into t3
+  (
+   t3.lbsiid,
+   t3.ltradingareaid
+  )
+  select distinct t1.lpitnumber, t2.ltradingareaid
+  from
+    t2 join t1 on
+      t1.lpitnumber = t2.lbsiid
+      and t1.lrecordtype = 1
+    left join t2 as price01 on
+      price01.lbsiid = t2.lbsiid and
+      price01.ltradingmodeid = 1 and
+      t2.ltradingareaid = price01.ltradingareaid;
+end|
+delimiter ;|
+
+call bug8849();
+call bug8849();
+call bug8849();
+drop procedure bug8849;
+drop tables t1,t2,t3;
diff --git a/sql/item_cmpfunc.cc b/sql/item_cmpfunc.cc
index dae5f0fc0c6..c0cb0704852 100644
--- a/sql/item_cmpfunc.cc
+++ b/sql/item_cmpfunc.cc
@@ -2289,6 +2289,21 @@ Item_cond::fix_fields(THD *thd, TABLE_LIST *tables, Item **ref)
 
   if (check_stack_overrun(thd, buff))
     return TRUE;				// Fatal error flag is set!
+  /*
+    The following optimization reduces the depth of an AND-OR tree.
+    E.g. a WHERE clause like
+      F1 AND (F2 AND (F2 AND F4))
+    is parsed into a tree with the same nested structure as defined
+    by braces. This optimization will transform such tree into
+      AND (F1, F2, F3, F4).
+    Trees of OR items are flattened as well:
+      ((F1 OR F2) OR (F3 OR F4))   =>   OR (F1, F2, F3, F4)
+    Items for removed AND/OR levels will dangle until the death of the
+    entire statement.
+    The optimization is currently prepared statements and stored procedures
+    friendly as it doesn't allocate any memory and its effects are durable
+    (i.e. do not depend on PS/SP arguments).
+  */
   while ((item=li++))
   {
     table_map tmp_table_map;
@@ -3265,6 +3280,7 @@ Item_equal::Item_equal(Item *c, Item_field *f)
   const_item= c;
 }
 
+
 Item_equal::Item_equal(Item_equal *item_equal)
   : Item_bool_func(), eval_item(0), cond_false(0)
 {
@@ -3301,12 +3317,7 @@ void Item_equal::add(Item_field *f)
 
 uint Item_equal::members()
 {
-  uint count= 0;
-  List_iterator_fast<Item_field> li(fields);
-  Item_field *item;
-  while ((item= li++))
-    count++;
-  return count;
+  return fields.elements;
 }
 
 
diff --git a/sql/item_cmpfunc.h b/sql/item_cmpfunc.h
index 212a3dd4501..5a87635a4dc 100644
--- a/sql/item_cmpfunc.h
+++ b/sql/item_cmpfunc.h
@@ -1095,6 +1095,12 @@ public:
   predicates that can not be used to access tables in the investigated
   plan for those, obtained by substitution of some fields for equal fields,
   that can be used.     
+
+  Prepared Statements/Stored Procedures note: instances of class
+  Item_equal are created only at the time a PS/SP is executed and
+  are deleted in the end of execution. All changes made to these
+  objects need not be registered in the list of changes of the parse
+  tree and do not harm PS/SP re-execution.
 */
 
 class Item_equal: public Item_bool_func
diff --git a/sql/mysql_priv.h b/sql/mysql_priv.h
index eb7ab7131dd..97331d3c1a6 100644
--- a/sql/mysql_priv.h
+++ b/sql/mysql_priv.h
@@ -805,6 +805,7 @@ void mysql_stmt_free(THD *thd, char *packet);
 void mysql_stmt_reset(THD *thd, char *packet);
 void mysql_stmt_get_longdata(THD *thd, char *pos, ulong packet_length);
 void reset_stmt_for_execute(THD *thd, LEX *lex);
+void init_stmt_after_parse(THD*, LEX*);
 
 /* sql_error.cc */
 MYSQL_ERROR *push_warning(THD *thd, MYSQL_ERROR::enum_warning_level level, uint code,
diff --git a/sql/sp_head.cc b/sql/sp_head.cc
index 06669e398ec..ad527d39d21 100644
--- a/sql/sp_head.cc
+++ b/sql/sp_head.cc
@@ -819,6 +819,7 @@ sp_head::restore_lex(THD *thd)
   LEX *sublex= thd->lex;
   LEX *oldlex= (LEX *)m_lex.pop();
 
+  init_stmt_after_parse(thd, sublex);
   if (! oldlex)
     return;			// Nothing to restore
 
diff --git a/sql/sql_prepare.cc b/sql/sql_prepare.cc
index 7da5c13e18a..d1594edc3f9 100644
--- a/sql/sql_prepare.cc
+++ b/sql/sql_prepare.cc
@@ -1809,20 +1809,33 @@ bool mysql_stmt_prepare(THD *thd, char *packet, uint packet_length,
   else
   {
     stmt->setup_set_params();
-    SELECT_LEX *sl= stmt->lex->all_selects_list;
-    /*
-      Save WHERE clause pointers, because they may be changed during query
-      optimisation.
-    */
-    for (; sl; sl= sl->next_select_in_list())
-      sl->prep_where= sl->where;
+    init_stmt_after_parse(thd, stmt->lex);
     stmt->state= Item_arena::PREPARED;
   }
   DBUG_RETURN(!stmt);
 }
 
 
-/* Reinit statement before execution */
+/*
+  Init PS/SP specific parse tree members.
+*/
+
+void init_stmt_after_parse(THD *thd, LEX *lex)
+{
+  SELECT_LEX *sl= lex->all_selects_list;
+  /*
+    Save WHERE clause pointers, because they may be changed during query
+    optimisation.
+  */
+  for (; sl; sl= sl->next_select_in_list())
+    sl->prep_where= sl->where;
+
+  for (TABLE_LIST *table= lex->query_tables; table; table= table->next_global)
+    table->prep_on_expr= table->on_expr;
+}
+
+
+/* Reinit prepared statement/stored procedure before execution */
 
 void reset_stmt_for_execute(THD *thd, LEX *lex)
 {
@@ -1883,6 +1896,12 @@ void reset_stmt_for_execute(THD *thd, LEX *lex)
     tables->table= 0;
     if (tables->nested_join)
       tables->nested_join->counter= 0;
+
+    if (tables->prep_on_expr)
+    {
+      tables->on_expr= tables->prep_on_expr->copy_andor_structure(thd);
+      tables->on_expr->cleanup();
+    }
   }
   lex->current_select= &lex->select_lex;
 
diff --git a/sql/sql_select.cc b/sql/sql_select.cc
index e886c658444..76d8ec1740a 100644
--- a/sql/sql_select.cc
+++ b/sql/sql_select.cc
@@ -6192,9 +6192,9 @@ finish:
     For b=c it will be called with *cond_equal=(0,[Item_equal(a,b)])
     and will transform *cond_equal into CE=(0,[Item_equal(a,b,c)]).
     For b=2 it will be called with *cond_equal=(ptr(CE),[])
-    and will transform *cond_equal into (ptr(CE,[Item_equal(2,a,b,c)]).
+    and will transform *cond_equal into (ptr(CE),[Item_equal(2,a,b,c)]).
     For f=e it will be called with *cond_equal=(ptr(CE), [])
-    and will transform *cond_equal into (ptr(CE,[Item_equal(f,e)]).
+    and will transform *cond_equal into (ptr(CE),[Item_equal(f,e)]).
 
   NOTES
     Now only fields that have the same type defintions (verified by
@@ -6463,6 +6463,11 @@ static COND *build_equal_items_for_cond(COND *cond,
      */      
       while ((item= li++))
       {
+        /*
+          PS/SP note: we can safely remove a node from AND-OR
+          structure here because it's restored before each
+          re-execution of any prepared statement/stored procedure.
+        */
         if (check_equality(item, &cond_equal))
           li.remove();
       }
@@ -6501,6 +6506,11 @@ static COND *build_equal_items_for_cond(COND *cond,
       if ((new_item = build_equal_items_for_cond(item, inherited))!= item)
       {
         /* This replacement happens only for standalone equalities */
+        /*
+          This is ok with PS/SP as the replacement is done for
+          arguments of an AND/OR item, which are restored for each
+          execution of PS/SP.
+        */
         li.replace(new_item);
       }
     }
@@ -6636,10 +6646,12 @@ static COND *build_equal_items(THD *thd, COND *cond,
         Item *expr;
         List<TABLE_LIST> *join_list= table->nested_join ?
 	                             &table->nested_join->join_list : NULL;
-        expr= build_equal_items(thd, table->on_expr, inherited, join_list,
-                                &table->cond_equal);
-        if (expr != table->on_expr)
-          thd->change_item_tree(&table->on_expr, expr);
+        /*
+          We can modify table->on_expr because its old value will
+          be restored before re-execution of PS/SP.
+        */
+        table->on_expr= build_equal_items(thd, table->on_expr, inherited,
+                                          join_list, &table->cond_equal);
       }
     }
   }
@@ -6866,10 +6878,14 @@ static COND* substitute_for_best_equal_field(COND *cond,
     while ((item= li++))
     {
       Item *new_item =substitute_for_best_equal_field(item, cond_equal,
-                                                        table_join_idx);
+                                                      table_join_idx);
+      /*
+        This works OK with PS/SP re-execution as changes are made to
+        the arguments of AND/OR items only
+      */
       if (new_item != item)
         li.replace(new_item);
-   }
+    }
 
     if (and_level)
     {
@@ -7198,7 +7214,7 @@ simplify_joins(JOIN *join, List<TABLE_LIST> *join_list, COND *conds, bool top)
 	*/ 
         expr= simplify_joins(join, &nested_join->join_list,
                              table->on_expr, FALSE);
-        table->on_expr= expr;
+        table->prep_on_expr= table->on_expr= expr;
       }
       nested_join->used_tables= (table_map) 0;
       nested_join->not_null_tables=(table_map) 0;
@@ -7238,7 +7254,7 @@ simplify_joins(JOIN *join, List<TABLE_LIST> *join_list, COND *conds, bool top)
         }
         else
           conds= table->on_expr; 
-        table->on_expr= 0;
+        table->prep_on_expr= table->on_expr= 0;
       }
     }
     
@@ -7319,10 +7335,7 @@ optimize_cond(JOIN *join, COND *conds, List<TABLE_LIST> *join_list,
   DBUG_ENTER("optimize_cond");
 
   if (!conds)
-  {
     *cond_value= Item::COND_TRUE;
-    select->prep_where= 0;
-  }
   else
   {
     /* 
diff --git a/sql/table.h b/sql/table.h
index 5ab1f900195..4306d3733c4 100644
--- a/sql/table.h
+++ b/sql/table.h
@@ -339,6 +339,15 @@ typedef struct st_table_list
   char		*db, *alias, *table_name, *schema_table_name;
   char          *option;                /* Used by cache index  */
   Item		*on_expr;		/* Used with outer join */
+  /*
+    The scturcture of ON expression presented in the member above
+    can be changed during certain optimizations. This member
+    contains a snapshot of AND-OR structure of the ON expression
+    made after permanent transformations of the parse tree, and is
+    used to restore ON clause before every reexecution of a prepared
+    statement or stored procedure.
+  */
+  Item          *prep_on_expr;
   COND_EQUAL    *cond_equal;            /* Used with outer join */
   struct st_table_list *natural_join;	/* natural join on this table*/
   /* ... join ... USE INDEX ... IGNORE INDEX */