diff --git a/org.eclipse.jdt.core.tests.compiler/src/org/eclipse/jdt/core/tests/compiler/regression/ResourceLeakTests.java b/org.eclipse.jdt.core.tests.compiler/src/org/eclipse/jdt/core/tests/compiler/regression/ResourceLeakTests.java
index 1dfb83c..d0786ca 100644
--- a/org.eclipse.jdt.core.tests.compiler/src/org/eclipse/jdt/core/tests/compiler/regression/ResourceLeakTests.java
+++ b/org.eclipse.jdt.core.tests.compiler/src/org/eclipse/jdt/core/tests/compiler/regression/ResourceLeakTests.java
@@ -2702,21 +2702,21 @@ public void test063a() throws IOException {
 			"    }\n" +
 			"}\n"
 		},
-		"----------\n" +
-		"1. ERROR in X.java (at line 8)\n" +
-		"	BufferedInputStream bis = new BufferedInputStream(stream); // never since reassigned\n" +
-		"	                    ^^^\n" +
-		"Resource leak: \'bis\' is never closed\n" +
-		"----------\n" +
-		"2. ERROR in X.java (at line 9)\n" +
-		"	FileInputStream stream2 = new FileInputStream(file); // unsure since passed to method\n" +
-		"	                ^^^^^^^\n" +
-		"Potential resource leak: \'stream2\' may not be closed\n" +
-		"----------\n" +
-		"3. ERROR in X.java (at line 10)\n" +
-		"	bis = getReader(stream2); // unsure since obtained from method\n" +
-		"	^^^^^^^^^^^^^^^^^^^^^^^^\n" +
-		"Potential resource leak: \'bis\' may not be closed\n" +
+		"----------\n" + 
+		"1. ERROR in X.java (at line 7)\n" + 
+		"	FileInputStream stream = new FileInputStream(file);\n" + 
+		"	                ^^^^^^\n" + 
+		"Resource leak: \'stream\' is never closed\n" + 
+		"----------\n" + 
+		"2. ERROR in X.java (at line 9)\n" + 
+		"	FileInputStream stream2 = new FileInputStream(file); // unsure since passed to method\n" + 
+		"	                ^^^^^^^\n" + 
+		"Potential resource leak: \'stream2\' may not be closed\n" + 
+		"----------\n" + 
+		"3. ERROR in X.java (at line 10)\n" + 
+		"	bis = getReader(stream2); // unsure since obtained from method\n" + 
+		"	^^^^^^^^^^^^^^^^^^^^^^^^\n" + 
+		"Potential resource leak: \'bis\' may not be closed\n" + 
 		"----------\n",
 		null,
 		true,
diff --git a/org.eclipse.jdt.core/compiler/org/eclipse/jdt/internal/compiler/ast/Assignment.java b/org.eclipse.jdt.core/compiler/org/eclipse/jdt/internal/compiler/ast/Assignment.java
index e328f12..ea1af7b 100644
--- a/org.eclipse.jdt.core/compiler/org/eclipse/jdt/internal/compiler/ast/Assignment.java
+++ b/org.eclipse.jdt.core/compiler/org/eclipse/jdt/internal/compiler/ast/Assignment.java
@@ -64,7 +64,7 @@ public FlowInfo analyseCode(BlockScope currentScope, FlowContext flowContext, Fl
 		.unconditionalInits();
 
 	if (shouldAnalyseResource)
-		FakedTrackingVariable.handleResourceAssignment(preInitInfo, flowInfo, this, this.expression, local);
+		FakedTrackingVariable.handleResourceAssignment(currentScope, preInitInfo, flowInfo, this, this.expression, local);
 	else
 		FakedTrackingVariable.cleanUpAfterAssignment(currentScope, this.lhs.bits, this.expression);
 
diff --git a/org.eclipse.jdt.core/compiler/org/eclipse/jdt/internal/compiler/ast/FakedTrackingVariable.java b/org.eclipse.jdt.core/compiler/org/eclipse/jdt/internal/compiler/ast/FakedTrackingVariable.java
index 0d2cbe9..b39419e 100644
--- a/org.eclipse.jdt.core/compiler/org/eclipse/jdt/internal/compiler/ast/FakedTrackingVariable.java
+++ b/org.eclipse.jdt.core/compiler/org/eclipse/jdt/internal/compiler/ast/FakedTrackingVariable.java
@@ -284,6 +284,7 @@ public class FakedTrackingVariable extends LocalDeclaration {
 	/** 
 	 * Check if the rhs of an assignment or local declaration is an (Auto)Closeable.
 	 * If so create or re-use a tracking variable, and wire and initialize everything.
+	 * @param scope scope containing the assignment
 	 * @param upstreamInfo info without analysis of the rhs, use this to determine the status of a resource being disconnected
 	 * @param flowInfo info with analysis of the rhs, use this for recording resource status because this will be passed downstream
 	 * @param location where to report warnigs/errors against
@@ -291,7 +292,7 @@ public class FakedTrackingVariable extends LocalDeclaration {
 	 *			The caller has already checked that the rhs is either of a closeable type or null.
 	 * @param local the local variable into which the rhs is being assigned
 	 */
-	public static void handleResourceAssignment(FlowInfo upstreamInfo, FlowInfo flowInfo, ASTNode location, Expression rhs, LocalVariableBinding local)
+	public static void handleResourceAssignment(BlockScope scope, FlowInfo upstreamInfo, FlowInfo flowInfo, ASTNode location, Expression rhs, LocalVariableBinding local)
 	{
 		// does the LHS (local) already have a tracker, indicating we may leak a resource by the assignment?
 		FakedTrackingVariable previousTracker = null;
@@ -338,9 +339,14 @@ public class FakedTrackingVariable extends LocalDeclaration {
 		}
 
 		if (disconnectedTracker != null) {
-			int upstreamStatus = upstreamInfo.nullStatus(disconnectedTracker.binding);
-			if (upstreamStatus != FlowInfo.NON_NULL)
-				disconnectedTracker.recordErrorLocation(location, upstreamStatus);
+			if (disconnectedTracker.innerTracker != null && disconnectedTracker.innerTracker.binding.declaringScope == scope) {
+				disconnectedTracker.innerTracker.outerTracker = null;
+				scope.pruneWrapperTrackingVar(disconnectedTracker);
+			} else {
+				int upstreamStatus = upstreamInfo.nullStatus(disconnectedTracker.binding);
+				if (upstreamStatus != FlowInfo.NON_NULL)
+					disconnectedTracker.recordErrorLocation(location, upstreamStatus);
+			}
 		}
 	}
 	/**
diff --git a/org.eclipse.jdt.core/compiler/org/eclipse/jdt/internal/compiler/ast/LocalDeclaration.java b/org.eclipse.jdt.core/compiler/org/eclipse/jdt/internal/compiler/ast/LocalDeclaration.java
index 239ef15..91808db 100644
--- a/org.eclipse.jdt.core/compiler/org/eclipse/jdt/internal/compiler/ast/LocalDeclaration.java
+++ b/org.eclipse.jdt.core/compiler/org/eclipse/jdt/internal/compiler/ast/LocalDeclaration.java
@@ -91,7 +91,7 @@ public FlowInfo analyseCode(BlockScope currentScope, FlowContext flowContext, Fl
 			.unconditionalInits();
 
 	if (shouldAnalyseResource)
-		FakedTrackingVariable.handleResourceAssignment(preInitInfo, flowInfo, this, this.initialization, this.binding);
+		FakedTrackingVariable.handleResourceAssignment(currentScope, preInitInfo, flowInfo, this, this.initialization, this.binding);
 	else
 		FakedTrackingVariable.cleanUpAfterAssignment(currentScope, Binding.LOCAL, this.initialization);
 
diff --git a/org.eclipse.jdt.core/compiler/org/eclipse/jdt/internal/compiler/lookup/BlockScope.java b/org.eclipse.jdt.core/compiler/org/eclipse/jdt/internal/compiler/lookup/BlockScope.java
index 24ad91f..30c8198 100644
--- a/org.eclipse.jdt.core/compiler/org/eclipse/jdt/internal/compiler/lookup/BlockScope.java
+++ b/org.eclipse.jdt.core/compiler/org/eclipse/jdt/internal/compiler/lookup/BlockScope.java
@@ -993,6 +993,10 @@ public void removeTrackingVar(FakedTrackingVariable trackingVariable) {
 	if (this.parent instanceof BlockScope)
 		((BlockScope)this.parent).removeTrackingVar(trackingVariable);
 }
+/** Unregister a wrapper resource without affecting its inner. */
+public void pruneWrapperTrackingVar(FakedTrackingVariable trackingVariable) {
+	this.trackingVariables.remove(trackingVariable);
+}
 /**
  * At the end of a block check the closing-status of all tracked closeables that are declared in this block.
  * Also invoked when entering unreachable code.