diff --git a/core/org.eclipse.cdt.core.tests/parser/org/eclipse/cdt/core/parser/tests/ASTComparer.java b/core/org.eclipse.cdt.core.tests/parser/org/eclipse/cdt/core/parser/tests/ASTComparer.java
index 2af63f30a0d..49e36dddf9b 100644
--- a/core/org.eclipse.cdt.core.tests/parser/org/eclipse/cdt/core/parser/tests/ASTComparer.java
+++ b/core/org.eclipse.cdt.core.tests/parser/org/eclipse/cdt/core/parser/tests/ASTComparer.java
@@ -48,7 +48,9 @@ public class ASTComparer extends Assert {
 		// avoid name resolution
 		"isDeclaration",
 		"isDefinition",
-		"isReference"
+		"isReference",
+		"isAssociatedWithLastName",
+		"getNestingLevel"
 	));
 
 	
diff --git a/core/org.eclipse.cdt.core.tests/parser/org/eclipse/cdt/core/parser/tests/ast2/AST2TemplateTests.java b/core/org.eclipse.cdt.core.tests/parser/org/eclipse/cdt/core/parser/tests/ast2/AST2TemplateTests.java
index ee85cd65de3..7a26e205353 100644
--- a/core/org.eclipse.cdt.core.tests/parser/org/eclipse/cdt/core/parser/tests/ast2/AST2TemplateTests.java
+++ b/core/org.eclipse.cdt.core.tests/parser/org/eclipse/cdt/core/parser/tests/ast2/AST2TemplateTests.java
@@ -3858,4 +3858,39 @@ public class AST2TemplateTests extends AST2BaseTest {
 		bh.assertNonProblem("getline2(i)", 8, ICPPTemplateInstance.class);
 		parseAndCheckBindings(code, ParserLanguage.CPP);
 	}
+	
+	// class C {
+	//   friend int f1(int);
+	// };
+	// template <typename T> class CT {
+	//   template <typename S> friend int f2(S);
+	// };
+	// template <typename T1> class C1 {
+	//   template <typename T2> class C2 {
+	//      template<typename T3> class C3 {
+	//      }; 
+	//   }; 
+	// };
+	public void testOwnerOfFriendTemplate_265671() throws Exception {
+		final String code = getAboveComment();
+		BindingAssertionHelper bh= new BindingAssertionHelper(code, true);
+		IFunction f= bh.assertNonProblem("f1(", 2, IFunction.class);
+		IBinding owner= f.getOwner();
+		assertNull(owner);
+		ICPPFunctionTemplate ft= bh.assertNonProblem("f2(", 2, ICPPFunctionTemplate.class);
+		owner= f.getOwner();
+		assertNull(owner);
+		ICPPTemplateParameter tpar= ft.getTemplateParameters()[0];
+		assertEquals(0, tpar.getTemplateNestingLevel());
+		
+		tpar= bh.assertNonProblem("T1", 2,  ICPPTemplateParameter.class);
+		assertEquals(0, tpar.getTemplateNestingLevel());
+		tpar= bh.assertNonProblem("T2", 2,  ICPPTemplateParameter.class);
+		assertEquals(1, tpar.getTemplateNestingLevel());
+		tpar= bh.assertNonProblem("T3", 2,  ICPPTemplateParameter.class);
+		assertEquals(2, tpar.getTemplateNestingLevel());
+		
+		parseAndCheckBindings(code, ParserLanguage.CPP);
+	}
+	
 }
diff --git a/core/org.eclipse.cdt.core/parser/org/eclipse/cdt/internal/core/dom/parser/cpp/CPPTemplateParameter.java b/core/org.eclipse.cdt.core/parser/org/eclipse/cdt/internal/core/dom/parser/cpp/CPPTemplateParameter.java
index dcafeb96e4e..2687697d9b5 100644
--- a/core/org.eclipse.cdt.core/parser/org/eclipse/cdt/internal/core/dom/parser/cpp/CPPTemplateParameter.java
+++ b/core/org.eclipse.cdt.core/parser/org/eclipse/cdt/internal/core/dom/parser/cpp/CPPTemplateParameter.java
@@ -57,6 +57,7 @@ public abstract class CPPTemplateParameter extends PlatformObject
 				if (tps == null) {
 					tps= tdecl.getTemplateParameters();
 				}
+				break;
 			} else if (node instanceof ICPPASTTemplatedTypeTemplateParameter) {
 				nesting++;
 				if (tps == null) {
diff --git a/core/org.eclipse.cdt.core/parser/org/eclipse/cdt/internal/core/dom/parser/cpp/semantics/CPPTemplates.java b/core/org.eclipse.cdt.core/parser/org/eclipse/cdt/internal/core/dom/parser/cpp/semantics/CPPTemplates.java
index 08f9d3caebe..77fb357247a 100644
--- a/core/org.eclipse.cdt.core/parser/org/eclipse/cdt/internal/core/dom/parser/cpp/semantics/CPPTemplates.java
+++ b/core/org.eclipse.cdt.core/parser/org/eclipse/cdt/internal/core/dom/parser/cpp/semantics/CPPTemplates.java
@@ -1068,18 +1068,18 @@ public class CPPTemplates {
 		}
 		
 		// determine nesting level of parent
-		int level= 0;
-		node= outerMostTDecl.getParent();
-		while (node != null) {
-			if (node instanceof ICPPASTInternalTemplateDeclaration) {
-				level= ((ICPPASTInternalTemplateDeclaration) node).getNestingLevel() + 1;
-				break;
+		int level= additionalLevels;
+		if (!CPPVisitor.isFriendFunctionDeclaration(innerMostTDecl.getDeclaration())) {
+			node= outerMostTDecl.getParent();
+			while (node != null) {
+				if (node instanceof ICPPASTInternalTemplateDeclaration) {
+					level+= ((ICPPASTInternalTemplateDeclaration) node).getNestingLevel() + 1;
+					break;
+				}
+				node= node.getParent();
 			}
-			node= node.getParent();
 		}
 		
-		level += additionalLevels;
-		
 		tdecl= outerMostTDecl;
 		while(true) {
 			tdecl.setNestingLevel((short) level++);
diff --git a/core/org.eclipse.cdt.core/parser/org/eclipse/cdt/internal/core/dom/parser/cpp/semantics/CPPVisitor.java b/core/org.eclipse.cdt.core/parser/org/eclipse/cdt/internal/core/dom/parser/cpp/semantics/CPPVisitor.java
index 9b4f56d06d9..7d9dca0440a 100644
--- a/core/org.eclipse.cdt.core/parser/org/eclipse/cdt/internal/core/dom/parser/cpp/semantics/CPPVisitor.java
+++ b/core/org.eclipse.cdt.core/parser/org/eclipse/cdt/internal/core/dom/parser/cpp/semantics/CPPVisitor.java
@@ -2010,6 +2010,14 @@ public class CPPVisitor extends ASTQueries {
 			node= node.getParent();
 		}
 
+		boolean isFriend= false;
+		if (node instanceof IASTSimpleDeclaration) {
+			ICPPASTDeclSpecifier declSpec= (ICPPASTDeclSpecifier) ((IASTSimpleDeclaration) node).getDeclSpecifier();
+			if (declSpec.isFriend()) {
+				isFriend= true;
+			}
+		}
+		
 		// Search for enclosing binding
 		IASTName name= null;
 		node= node.getParent();
@@ -2025,6 +2033,8 @@ public class CPPVisitor extends ASTQueries {
 				break;
 			} 
 			if (node instanceof IASTCompositeTypeSpecifier) {
+				if (isFriend)
+					continue;
 				name= ((IASTCompositeTypeSpecifier) node).getName();
 				break;
 			}
@@ -2038,4 +2048,24 @@ public class CPPVisitor extends ASTQueries {
 		
 		return name.resolveBinding();
 	}
+
+	/**
+	 * Check whether a given declaration is a friend function declaration.
+	 */
+	public static boolean isFriendFunctionDeclaration(IASTDeclaration declaration) {
+		while (declaration instanceof ICPPASTTemplateDeclaration) {
+			declaration= ((ICPPASTTemplateDeclaration) declaration).getDeclaration();
+		}
+		if (declaration instanceof IASTSimpleDeclaration) {
+			IASTSimpleDeclaration sdecl = (IASTSimpleDeclaration) declaration;
+			ICPPASTDeclSpecifier declspec= (ICPPASTDeclSpecifier) sdecl.getDeclSpecifier();
+			if (declspec.isFriend()) {
+				IASTDeclarator[] dtors= sdecl.getDeclarators();
+				if (dtors.length == 1 && findTypeRelevantDeclarator(dtors[0]) instanceof IASTFunctionDeclarator) {
+					return true;
+				}
+			}
+		}
+		return false;
+	}
 }