diff --git a/core/org.eclipse.cdt.core.tests/parser/org/eclipse/cdt/core/parser/tests/ast2/AST2CPPTests.java b/core/org.eclipse.cdt.core.tests/parser/org/eclipse/cdt/core/parser/tests/ast2/AST2CPPTests.java
index d43e81405fa..ca708da7e2d 100644
--- a/core/org.eclipse.cdt.core.tests/parser/org/eclipse/cdt/core/parser/tests/ast2/AST2CPPTests.java
+++ b/core/org.eclipse.cdt.core.tests/parser/org/eclipse/cdt/core/parser/tests/ast2/AST2CPPTests.java
@@ -4822,4 +4822,28 @@ public class AST2CPPTests extends AST2BaseTest {
         IFunction free = (IFunction) col.getName(0).resolveBinding();
         assertSame( free, col.getName(4).resolveBinding() );
     }
+    
+    public void testBug86688() throws Exception {
+    	StringBuffer buffer = new StringBuffer();
+    	buffer.append("class X;                 \n");
+    	buffer.append("void f() {               \n");
+    	buffer.append("   class A {             \n");
+    	buffer.append("      friend class X;    \n");
+    	buffer.append("   };                    \n");
+    	buffer.append("}                        \n");
+    	buffer.append("namespace B {            \n");
+    	buffer.append("   class A {             \n");
+    	buffer.append("      friend class X;    \n");
+    	buffer.append("   };                    \n");
+    	buffer.append("}                        \n");
+    	
+    	IASTTranslationUnit tu = parse(buffer.toString(), ParserLanguage.CPP, true, true );
+    	CPPNameCollector col = new CPPNameCollector();
+        tu.accept(  col );
+        
+        ICPPClassType X = (ICPPClassType) col.getName(0).resolveBinding();
+        assertNotSame( X, col.getName(3).resolveBinding() );
+        assertTrue( col.getName(3).resolveBinding() instanceof ICPPClassType );
+        assertSame( X, col.getName(6).resolveBinding() );
+    }
 }
diff --git a/core/org.eclipse.cdt.core/parser/org/eclipse/cdt/internal/core/dom/parser/cpp/CPPSemantics.java b/core/org.eclipse.cdt.core/parser/org/eclipse/cdt/internal/core/dom/parser/cpp/CPPSemantics.java
index 814622c8f33..e04f136cf0f 100644
--- a/core/org.eclipse.cdt.core/parser/org/eclipse/cdt/internal/core/dom/parser/cpp/CPPSemantics.java
+++ b/core/org.eclipse.cdt.core/parser/org/eclipse/cdt/internal/core/dom/parser/cpp/CPPSemantics.java
@@ -382,6 +382,42 @@ public class CPPSemantics {
             }
             return implied;
         }
+		public boolean forFriendship() {
+			if( astName == null )
+				return false;
+			IASTNode node = astName.getParent();
+			while( node instanceof IASTName )
+				node = node.getParent();
+			
+			IASTDeclaration decl = null;
+			IASTDeclarator dtor = null;
+			if( node instanceof ICPPASTDeclSpecifier && node.getParent() instanceof IASTDeclaration ){
+				decl = (IASTDeclaration) node.getParent();
+			} else if( node instanceof IASTDeclarator ) {
+				dtor = (IASTDeclarator) node;
+				while( dtor.getParent() instanceof IASTDeclarator )
+					dtor = (IASTDeclarator) dtor.getParent();
+				if( !(dtor.getParent() instanceof IASTDeclaration) )
+					return false;
+				decl = (IASTDeclaration) dtor.getParent();
+			} else {
+				return false;
+			}
+			if( decl instanceof IASTSimpleDeclaration ){
+				IASTSimpleDeclaration simple = (IASTSimpleDeclaration) decl;
+				if( ! ((ICPPASTDeclSpecifier)simple.getDeclSpecifier()).isFriend() )
+					return false;
+				if( dtor != null )
+					return true;
+				return simple.getDeclarators().length == 0;
+			} else if( decl instanceof IASTFunctionDefinition ){
+				IASTFunctionDefinition fnDef = (IASTFunctionDefinition) decl;
+				if( ! ((ICPPASTDeclSpecifier)fnDef.getDeclSpecifier()).isFriend() )
+					return false;
+				return ( dtor != null );
+			}
+			return false;
+		}
 	}
 
 	static protected class Cost
@@ -871,6 +907,15 @@ public class CPPSemantics {
 		else
 		    scope = getLookupScope( (IASTName) start );
 		
+		boolean friendInLocalClass = false;
+		if( scope instanceof ICPPClassScope && data.forFriendship() ){
+			try {
+				ICPPClassType cls = ((ICPPClassScope)scope).getClassType();
+				friendInLocalClass = !cls.isGloballyQualified();
+			} catch ( DOMException e ){
+			}
+		}
+		
 		while( scope != null ){
 			IASTNode blockItem = CPPVisitor.getContainingBlockItem( node );
 			
@@ -926,8 +971,11 @@ public class CPPSemantics {
 				}
 			}
 			
-			if( !data.prefixLookup && (data.problem != null || data.hasResults()) )
+			if( (!data.prefixLookup && (data.problem != null || data.hasResults())) ||
+				( friendInLocalClass && !(scope instanceof ICPPClassScope) ) )
+			{
 				return;
+			}
 			
 			if( !data.usingDirectivesOnly && scope instanceof ICPPClassScope ){
 				mergeResults( data, lookupInParents( data, scope ), true );