--- mc-4.7.0-pre4.orig/src/tty/tty-slang.c     2009-11-07 16:29:08.000000000 0100
+++ mc-4.7.0-pre4/src/tty/tty-slang.c  2009-11-07 16:28:50.000000000 +0100
@@ -499,7 +499,7 @@ tty_set_alt_charset (gboolean alt_charse
 void
 tty_display_8bit (gboolean what)
 {
-    SLsmg_Display_Eight_Bit = what ? 128 : 160;
+    SLsmg_Display_Eight_Bit = what & xterm_flag ? 128 : 160;
 }
 
 void